HPCL "Market penetration of HP-Gas"

VIDYALANKAR INSTITUTE OF TECHNOLOGY AND MANAGEMENT,MUMBAI

2014

MARKET

PENETRATION OF

HP-GAS IN URBAN

AND RURAL

MARKET SUMMER INTERNSHIP REPORT

BY RUSHIKESH K. KALE,MMS MARKETING (2013-15)

H I N D U S T A N P E T R O L E U M C O R P O R A T I O N L I M I T E D

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MARKET PENETRATION OF HP-GAS IN URBAN AND RURAL MARKET

SUMMER INTERNSHIP REPORT ON

STRATEGIES TO INCREASE MARKET

PENETRATION OF

HP-GAS IN URBAN AND RURAL MARKET

SUBMITTED BY

RUSHIKESH K. KALE

UNDER THE GUIDANCE OF

PROF.PANKAJ PAMANI

A PROJECT SUBMITTED IN PARTIAL FULFILMENT OF MMS

TO

VIDYALANKAR INSTITUTE OF TECHNOLOGY

WADALA (EAST), MUMBAI 400 037

JULY 2014

Signature of Faculty Guide Head of Department

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DECLARATION

This is to declare that the study presented by me to Vidyalankar Institute of Technology, in completion of

the Master in Management Studies (MMS) under the “Market Penetration of HP-GAS” has been

accomplished under the guidance of Prof.Pankaj Pamani.

Place: Mumbai, (Maharashtra)

Date: 30th

June 2014 Signature of the Student.

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To be attached on letter head

CERTIFICATE FROM COMPANY

TO WHOM IT MAY CONCERN:

This is to certify that Mr. Rushikesh K .Kale student of MBA of Vidyalankar Institute of

Management,Mumbai has completed Summer Project Report titled “Market Penetration Of

HP-GAS in Urban and Rural Market” with us from 2/05/2014 to 30/06/2014.

He has completed the Project Work to our satisfaction.

Place:Mahul,Mumbai Signature of Official Name and Designation of Official

Date:30th

June 2014

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ACKNOWLEDGEMENT

My project on “Market Penetration of HP-GAS in Urban and Rural Market” has been a great

learning experience. I was exposed to the different areas of research in marketing and gained valuable

experience, which I will always recall with a sense of satisfaction and pride.

This is to acknowledge Prof.Pankaj Pamani under whose guidance I have been able to successfully

complete this project and effectively come to a very successful conclusion.

A greater share of inputs and data from Mr.Shabbir Azam, Sr.Operations Officer, HPCL,Mumbai made

this project report possible to its rightful accuracy.

To all my colleagues who have helped me either directly or indirectly, I am grateful for their valuable

inputs. This project would not have been possible without their help.

RUSHIKESH K.KALE

VIT-MMS

(STUDENT)

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TABLE OF CONTENTS

DECLARATION ............................................................................................................................... 2

CERTIFICATE FROM COMPANY ................................................................................................ 3

ACKNOWLEDGEMENT ................................................................................................................. 4

EXECUTIVE SUMMARY ............................................................................................................... 8

OBJECTIVE OF STUDY ................................................................................................................ 12

ABOUT HPCL ................................................................................................................................ 14

COMPANY PERFORMANCE ....................................................................................................... 15

VISION ............................................................................................................................................ 16

MISSION ......................................................................................................................................... 16

QUALITY POLICY ........................................................................................................................ 16

PRODUCT COMMITMENT .......................................................................................................... 16

INTRODUCTION TO LPG ............................................................................................................ 19

PROPERTIES OF LPG ................................................................................................................... 20

WHY USE LP GAS? ....................................................................................................................... 22

USES OF LPG ................................................................................................................................. 23

LPG MARKET IN INDIA .............................................................................................................. 26

COMPETITIVE ENVIRONMENT ................................................................................................ 31

CHALLENGES OF LPG BUSINESS ............................................................................................. 33

DISTRIBUTION CHAIN OF LPG ................................................................................................. 35

LPG DISTRIBUTION OF HP-GAS ............................................................................................... 36

CUSTOMER RETENTION TECHNIQUES .................................................................................. 38

PLANT OPERATIONS................................................................................................................... 39

CHARACTERISTICS OF RURAL LPG MARKETS ................................................................... 47

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KEY CHARACTERISTICS ............................................................................................................ 47

KEY BARRIERS TO RURAL HOUSEHOLD DISTRIBUTION ................................................. 50

BARRIERS TO SUCCESSFUL RURAL LP GAS DISTRIBUTION ........................................... 51

DEMAND SIDE AND COMMUNITY RELATED BARRIERS .................................................. 52

SUPPLY SIDE AND MACRO STAKEHOLDER BARRIERS..................................................... 54

RURAL INITIATIVES OF HPCL .................................................................................................. 57

COMMUNITY KITCHENS: SELLING COOKING TO POOR FAMILIES IN INDIA .............. 57

HPCL'S RASOI GHAR PROJECT ................................................................................................. 58

LP GAS PROPAGANDA VANS FOR CREATING GREATER PUBLIC AWARENESS IN

INDIA .............................................................................................................................................. 60

RAJIV GANDHI GRAMIN LPG VITARAN YOJANA (RGGLVY) ........................................... 61

DEEPAM SCHEME ........................................................................................................................ 63

RESEARCH METHODOLOGY .................................................................................................... 66

METHODOLOGY .......................................................................................................................... 67

SURVEY FOR DOMESTIC SEGMENT ....................................................................................... 67

SURVEY FOR COMMERCIAL SEGMENT ................................................................................. 68

SURVEY FOR RURAL SEGMENT .............................................................................................. 70

DATA COLLECTION .................................................................................................................... 72

DOMESTIC SURVEY .................................................................................................................... 72

COMMERCIAL SURVEY ............................................................................................................. 72

RURAL SURVEY ........................................................................................................................... 73

DATA ANALYSIS OF SURVEY .................................................................................................. 75

DATA ANALYSIS OF DOMESTICSEGMENT ........................................................................... 75

DATA ANALYSIS OF COMMERCIAL SEGMENT ................................................................... 83

DATA ANALYSIS OF RURAL SEGMENT ................................................................................. 89

SWOT ANALYSIS ......................................................................................................................... 99

KEY SUCCESS FACTORS FOR HP-GAS.................................................................................. 101

QUESTIONNAIRE FOR DOMESTIC SEGMENT ..................................................................... 105

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QUESTIONNAIRE FOR COMMERCIAL SEGMENT .............................................................. 107

QUESTIONNAIRE FOR RURAL SEGMENT ............................................................................ 109

RECOMMENDATIONS ............................................................................................................... 112

CONCLUSION.............................................................................................................................. 116

BIBLOGRAPHY ........................................................................................................................... 118

ABBREVIATIONS ....................................................................................................................... 120

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EXECUTIVE SUMMARY

This project deals with market penetration of HP-GAS LPG business in urban and rural market.

The focus is pertaining to the retailing and distribution of LPG. We start with the basics of LPG, its

constituents,properties and study plant operations. Following to it the demand supply scenario and the

major players in the business in India have been discussed. The supply chain of the LPG business,

starting right from procuring, storage, retailing and distribution processes have been explained in

details. Next comes the marketing of LPG, which had unique characteristics because of the fact the

product cannot be seen either by the producer neither the consumer. Therefore it is important from the

company’s point of view to create a perception in the minds of the consumer that of reliability and safety.

The market segment consists of Domestic, Commercial and Industrial segment and the marketing

as well as the pricing policies varies accordingly. One of the biggest challenges of the business of LPG is

the diversion of the cylinders from the Domestic segment to the Commercial and Industrial segment. It

is in the interest of the company to orient the distributor and consumers according to the

regulations of the business. The motivation arises from the subsidized price of Domestic LPG, which

is not the case in Commercial and Industrial segment.Further characteristics of rural market are studied

like barriers in rural market penetration of LPG and innitiatives of HPCL for promoting LPG.

Finally, the competitive environment of the business has been analyzed. The Intra Oil Marketing

Company’s competition, as well as the competition between Private Oil Marketing Companies has

been explained. Again, the threat from one of the most potent substitute of LPG, Piped Natural Gas has

been analyzed. Though LPG is a more efficient fuel than Natural gas (higher calorific value), but the

advantages in case of Natural gas outweighs the LPG by some amount. Until the infrastructure for

distribution of Natural gas is present, Liquefied Petroleum Gas will continue to be in existence, though

to make this business viable the abolition of the subsidy regime needs to be implemented.

The ojective of project is increase market penetration of HP-GAS LPG business in urban and

rural market.The objective of project is also to create safety awareness of LPG and to identify parameters

affectng purchase decision of LPG for domestic and rural segment.This survey undertaken will also help

to identify parameters for acceptability of LPG as fuel for heating over conventional fuels for in

commercial segment.

The finding of survey will help to understand barriers in market expansion of HP-GAS in

Domestic,Commercial and Rural market.Thus will help in formulating intensive marketing strategies for

promoting LPG.

Survey was undertaken for three markets:-

1.Domestic Market (Sample Size-100)

2.Rural Market (Sample Size-60)

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3.Commercial Market (Sample Size-40)

Questinnaire was formulated and face to face interviews were done with respondents.

Key Findings:-

For Domestic Segment

1. Fast,correct and convinient refilling is utmost important for customer satisfaction.

2. According to responses noted,timely delivery,periodic safety checks by dealer and prompt service

is desired by customer.

3. IT plays a major role creating a bridge between Company-Dealer-Customer.

4. Various customer portals like transparency portal which creates transperency in refilling

process,HP-Anytime to assure 24hr prompt service,IVRS system for ease in refilling,DCMS for

distributor customer managementsystem.

5. PNG is potential future threat for all OMC’s where customers(51%) are willing to switch to PNG.

6. Periodic safety checks and PDC should be intensified by dealer.

7. Periodic safety awareness campaigns should be undertaken on pilot basis by dealer/company.

8. Advertisement(TV), Print Media and SMS are considered best mode to promote HP-GAS and

create safety awareness of LPG.

9. New connection cost should be displayed.

10. Promotion of HP-Gas android aplication for ease in refilling bottles should be done.

For Commercial Segment:-

1. Price variations of LPG has forced many industries to switch over to conventional fuels.

2. Baking(68%) and Hotel(100%) industries are major consumers of LPG where textile

industries(27% using LPG) have switched to coal and furnace oil as it is price driven market.

3. Quality of service also is major parameter for customer retention.

4. Several industries(58%) are willing to switch to PNG due its easy affordability and

availabilty,while some industries(42%) are reluctant due to additional cost incurred in setting up

new installations.

5. Agressive marketing is followed by competitor OMC’s and PMC’s which has affected market

share of HPCL in commercial segment.

For Rural Segment:-

1. Lack of awareness of LPG is major barrier for market penetration of LPG where LPG in percieved

as unsafe and dangerous(53%).

2. Intense Promotion campaign in rural market should be done.

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3. Education is important parameter in purchase decision of LPG where only 15% households use

LPG.

4. Majority(80%) of villagers live in mud house where literacy rate is only 34%,villagers are

deprived of basic amenities like water and electricity.

5. Key barrier for LPG penetration is easy avalibility of wood(70%) which is used as major fuel for

cooking due to which health issues are faced by 80% of households.

6. Households using LPG have to incur additional cost for transportation to get refill as it is

infeasible for dealer to deliver cylinders in remote location with scare demand thus LPG is used as

substitute along with wood.

7. Best mode of promotion of LPG as recommended by respondents are haat,fairs and wall

painting,road shows to create awareness of LPG.TV Adv is less preffered as most of house hold

are below poverty line.

8. Rural respondents are unaware of benifits(70%) of LPG and financial schemes(63%) led by Govt.

for promotion of LPG.

9. High acceptibility(60%) for “Rasoi Ghar”-Community Kitchen and 5kg cylinder with mounted

stove.

10. 90% of rural households are willing to switch to LPG if 3 A’s affordability, availabilty,awareness

are met.

Research identified the following problems among non-users of LPGL:-

Affordability

o High connection cost of Rs 1600 (73%) (for year 2014)

o High recurring cost for refill @ Rs. 453 (51%)

o Options for cooking at low cost/zero cost e.g., firewood ,dung cake

Availability

o Nearest place where LPG is available is town located 10 kms away or more (61%)

Awareness

o Extremely low awareness about actual cost of connection (20%), most believed wrongly ,it

cost Rs 2,000 or more

Acceptance barriers (myths)

o Fear of cylinder burst

o Gas leakage fire hazard

o LPG requires electricity

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OBJECTIVE

SCOPE

AND

LIMITATIONS

OF PROJECT

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OBJECTIVE OF STUDY

The motive of this project is to generate the idea of sustainable competitive growth through which various

plans of increasing market penetration of HP-GAS in urban and rural market which can be put into action

by means of analysis of market potential.

PURPOSE OF THE STUDY

Purpose of making project is to understand the basic fundamentals of LPG industry and to understand the

formulation and execution of strategies to sustain and maximize the market penetration and the strategy to

increase the market share of HPCL in commercial and domestic market.

Profit Maximization ensuring growth of company for long term benefit.

Brand Building.

Enhance Customer Experience.

Maximizing promotion.

Methodology: Literature review through secondary data, then expert opinion by interviewing the sales

officers within the industry and interviewing the domestic and commercial customers.

Findings and Conclusions: Thus the basic reasons for the success of HP-Gas depends on the seven

factors, these are:

Brand Name

Brand Image

Positioning in the mind of consumer

Quality of parent brand

Proper and longer support

Above the Line Promotion

Below the Line Promotion

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LIMITATIONS OF THE STUDY

Though all the efforts have been made for an in-depth study and delineating the correct picture, but in

course of doing so, there were some limitations involved with the methodology adopted.

1. Survey is conducted in some areas of Mumbai and Navi Mumbai region which may not be large

enough to generalize on a nationwide scale.

2. A sample size of 100 was taken to fill the questionnaire which again might not be sufficient, to

represent the true picture of perception & attitude.

3. Findings are restricted to geographical boundaries of Mumbai region.

4. The time constraint did not allowed interaction with each individual.

5. Respondents can be bias towards some personal liking or disliking which restricts them giving

their frank and fair opinion.

6. Since the perception and attitudes varies with each individual so this effect has been reflected in

the study

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ABOUT HPCL

HPCL is a Government of India Enterprise and a Fortune Global 500 and Forbes 2000 Company.

It holds the Navratna status, and had gross sales of Rs. 215,675 Crores for

FY 2012-13. It has 20.19 per cent marketing share in India among Public Sector Oil Marketing

Companies (OMCs) and a strong market infrastructure.

HPCL has a vast marketing network which consists of 13 Zonal offices in major cities and 101 Regional

offices. This is facilitated by a Supply & Distribution infrastructure comprising of Terminals, Inland

Relay Depots & Retail Outlets, Aviation Fuel Stations, Pipeline networks, LPG Bottling Plants, Lube and

LPG Distributorship. The total number of employees is 11,027 as on March 31, 2013. Company

continues to invest in innovative technologies to enhance the effectiveness of employees and bring

qualitative changes in service, Business Process Re-Engineering exercises and creation of Strategic

Business Units (SBU), Enterprises Resource Planning (ERP) implementation, Organizational

Transformation, Balanced Score Card, Competency Mapping, benchmarking of refineries and terminals

for product specifications, ISO certification of Refineries and Supply Chain Management are some of the

initiatives that broke new grounds. This has helped in improving operational and financial efficiencies.

The refining capacity has seen a growth from 5.5 MMTPA in FY 1984-85 to 14.8 MMTPA presently.

Company turnover has grown from Rs.2687 Crores in FY 1984-85 to an impressive Rs. 215,675 Crores

in FY 2012-13.

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COMPANY PERFORMANCE

Hindustan Petroleum Corporation Limited registered gross sales of Rs.2,15,675 Crores for FY

2012-13 as against Rs.1,88,131 Crores in the previous year representing an increase of over 14.6 per cent.

The sales of petroleum products in the domestic market were also at an all-time high of 29.07 million tons

during FY 2012-13, registering an increase of 4.6 per cent over the previous year, as against the industry

growth rate of 3.6 per cent.

Gross sales (Rs. Crores) Operating Costs (Rs.Crores)

2012-13 2011-12 2010-11 2012-13 2011-12 2010-11

PAT(Rs.Crores) Employee Wages and Benefits (Rs.Crores)

2012-13 2011-12 2010-11 2012-13 2011-12 2010-11

In line with the gross sales, the Company’s operating costs increased in current year. Another

reason for this trend was the rising cost of input material and higher labour costs. Company incurred

higher outgo towards employee wages and benefits to retain the talent pool and on account of

implementation of the long term settlement signed with the union.

215,675.5 188,131

142,396

204,339.7

176,826

135,035

1,539.0

911.4 904.7

2,525.5

1,981.8 1,583

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VISION

To be a World Class Energy Company known for caring and delighting the customers with high quality

products and innovative services across domestic and international markets with aggressive growth and

delivering superior financial performance. The Company will be a model of excellence in meeting social

commitment, environment, health and safety norms and in employee welfare and relations.

MISSION

HPCL, along with its joint ventures, will be a fully integrated company in the hydrocarbons sector

of exploration and production, refining and marketing; focusing on enhancement of productivity, quality

and profitability; caring for customers and employees; caring for environment protection and cultural

heritage.

It will also attain scale dimensions by diversifying into other energy related fields and by taking up

transnational operations.

QUALITY POLICY

• Total customer satisfaction through quality products by doing it right the first time, every time.

• Ensure consistency of quality, and adherence to time deadlines.

• Strive to achieve excellence in quality through training, motivation, team work and continuous up

gradation of technology.

• To take appropriate steps to minimize wastage, increase productivity and optimize the quality of

products and services in a cost effective manner

PRODUCT COMMITMENT

• To provide quality products and services this shall reflect in a growing list of satisfied customers.

• To consciously build a quality culture, through employee participation, motivation and training.

• To strive for an eco - friendly environment.

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ENVIRONMENT POLICY

HPCL aims to have safe, healthy and pollution free environment in and around all refineries,

plants, facilities and other premises at all times; in still awareness in these areas, including

relevant laws, in all employees, their families and the communities in which they carry out

activities.

The Corporation is committed to conduct its operation in such a manner as compatible with

environment and economic development of the community. Its aim is to create an awareness and

respect for the environment, stressing on every employee’s involvement in environmental

improvement by ensuring healthy operating practices, philosophy and training.

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LITERATURE REVIEW

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INTRODUCTION TO LPG

LP Gas (or LPG) stands for “Liquefied Petroleum Gas”. The term is widely used to describe two

prominent members of a family of light hydrocarbons called “Natural Gas Liquids” (NGLs): propane

(C3H8) and butane (C4H10). The other members of the Natural gas like ethane and condensates have

their own distinctive markets.

The term “liquefied gas” may seem a contradiction in terms since all things in nature are either a liquid or

a solid or a gas. Yet, liquidity is the unique character of LP Gas that makes it such a popular and widely

used fuel. At normal temperature and pressure, LP Gas is gaseous. It changes to a liquid when subjected

to modest pressure or cooling. In liquid form the tank pressure is about twice the pressure in a normal

truck tires, which means it is very safe when properly handled.

LP Gas is liquefied to make it easy to transport and store. One unit of liquid has the same energy

content as 270 units of gas. As a gas, the container to hold the fuel would be 270 times larger than what is

required as a liquid. In other words, LP Gas has density (compactness) for storage and transportation, yet

all the benefits of a clean gaseous fuel when used at the burner tip. It is also worth noting that LP Gas is a

clean, green fuel, with less harmful emissions and greenhouse gasses than other fuels such as petrol,

kerosene, oil and diesel.

LP Gas usually consists of a mixture of propane and butane for standard heating and cooking

purposes. Propane starts vaporizing above -45°C, so it is more versatile for general use. Butane starts

vaporizing above -2°C and requires either a propane/butane mixture in cold environments or pre-heating

as it will not vaporize as readily as propane. LP Gas can also be used in specialized applications that

require a more rigorous specification. Examples include food processing, aerosol propellants and

automotive fuel.

LP Gas is a derivative of two large energy industries: the processing of natural gas liquids and the

refining of crude oil.

Natural gas processing:-

When gas is drawn from the earth, it is a mixture of several gases and liquids. Commercial natural gas is

mainly composed of methane. However, it also contains ethane, propane and butane in accordance with

the specifications for natural gas in each country in which it is distributed. Therefore, before natural gas is

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marketed, some NGLs, including LP Gases (propane and butane) are separated out, depending on the

“wetness” of the gas produced: NGLs represent 1 to 10% of the unprocessed gas stream.

Some NGLs are also trapped in crude oil. In order to stabilise the crude oil for pipeline or tanker

distribution, these “associated” or “natural gases” are further processed into LP Gas. Worldwide, gas

processing is the source of approximately 60% of LP Gas produced.

Crude oil refining:-

In an oil refinery, LP Gases are produced at various stages: atmospheric distillation, reforming, cracking

and others. The LP Gas produced will be between 1 and 4% of crude oil processed. This yield will depend

on the type of crude oil, the degree of sophistication of the oil refinery and the market values of propane

and butane compared to other oils products. Worldwide, refining is the source of approximately 40% of

LP Gas produced.

Like all other hydrocarbons obtained from oil and gas, LP Gas has its own distinct marketing advantages

and can perform nearly every fuel function as the primary fuels from which it is derived. Furthermore

steadily growing throughout the world and forecasts show this trend will continue.

Properties of LPG

LPG is a mixture of commercial butane and commercial propane having both saturated and unsaturated

hydrocarbons. LPG marketed in India is be governed by Indian Standard Code IS-4576.

PHYSICAL PROPERTIES AND CHARACTERISTICS

DENSITY

LPG at atmospheric pressure and temperature is a gas which is 1.5 to 2.0 times heavier than air. It is

readily liquefied under moderate pressures. The density of the liquid is approximately half that of water

and ranges from 0.525 to 0.580 @ 15 deg. C.

Since LPG vapour is heavier than air, it would normally settle down at ground level/ low lying places,

and accumulate in depressions.

VAPOUR PRESSURE

The pressure inside a LPG storage vessel/ cylinder will be equal to the vapour pressure corresponding to

the temperature of LPG in the storage vessel. The vapour pressure is dependent on temperature as well as

on the ratio of mixture of hydrocarbons. At liquid full condition any further expansion of the liquid, the

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cylinder pressure will rise by approx. 14 to 15 kg./sq.cm. for each degree centigrade. This clearly explains

the hazardous situation that could arise due to overfilling of cylinders.

FLAMMABILITY

LPG has an explosive range of 1.8% to 9.5% volume of gas in air. This is considerably narrower than

other common gaseous fuels. This gives an indication of hazard of LPG vapour accumulated in low lying

area in the eventuality of the leakage or spillage.

The auto-ignition temperature of LPG is around 410-580 deg. C and hence it will not ignite on its own at

normal temperature.

Entrapped air in the vapour is hazardous in an unpurged vessel/ cylinder during pumping/ filling-in

operation. In view of this it is not advisable to use air pressure to unload LPG cargoes or tankers.

COMBUSTION

The combustion reaction of LPG increases the volume of products in addition to the generation of heat.

LPG requires upto 50 times its own volume of air for complete combustion. Thus it is essential that

adequate ventilation is provided when LPG is burnt in enclosed spaces otherwise asphyxiation due to

depletion of oxygen apart from the formation of carbon-dioxide can occur.

ODOUR

LPG has only a very faint smell, and consequently, it is necessary to add some odourant, so that any

escaping gas can easily be detected.

Ethyl Mercaptan is normally used as stenching agent for this purpose. The amount to be added should be

sufficient to allow detection in atmosphere 1/5 of lower limit of flammability or odour level 2 as per IS:

4576.

COLOUR

LPG is colourless both in liquid and vapour phase. During leakage the vapourisation of liquid cools the

atmosphere and condenses the water vapour contained in them to form a whitish fog which may make it

possible to see an escape of LPG.

TOXICITY

LPG even though slightly toxic, is not poisonous in vapour phase, but can, however, suffocate when in

large concentrations due to the fact that it displaces oxygen. In view of this the vapour possess mild

anesthetic properties.

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WHY USE LPG?

LP Gas is a modern and safe energy which can be used anywhere. Other energy sources are

available, so why chose LP Gas over the alternatives? Many good reasons include:

Accessible

LP Gas can be accessible to everyone everywhere today without major infrastructure investment,

particularly in areas of developing countries with no access to modern, grid-based energy. Nothing needs

to be invented and there are enough reserves to last many decades.

Clean

LP Gas is very clean burning and has lower greenhouse gas emissions than any other fossil fuel when

measured on a total fuel cycle. Originating mainly from natural gas production, it will not contaminate

soil or aquifers in the event of a leak.

Convenient

LP Gas is a multi-purpose energy. There are more than a thousand applications, from cooking, heating,

air conditioning and transportation, to cigarette lighters and even the Olympic torch.

Efficient

LP Gas is cost-effective, since a high proportion of its energy content is converted into heat. LP Gas can

be up to five times more efficient than traditional fuels, resulting in less energy wastage and better use of

our planet’s resources.

Portable

LP Gas can be transported, stored, and used virtually anywhere in the world. It does not require a fixed

network and will not deteriorate over time.

Safe

LP Gas compared to other fuels has an excellent safety record worldwide when handled properly and is

non-toxic.

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USES OF LPG

Rural heating

Predominantly in Europe and rural parts of many countries, LPG can provide an alternative to electricity

and heating oil (kerosene). LPG is most often used where there is no access to piped natural gas.

LPG can be used as a power source for combined heat and power technologies (CHP). CHP is the process

of generating both electrical power and useful heat from a single fuel source. This technology has allowed

LPG to be used not just as fuel for heating and cooking, but also for de-centralized generation of

electricity.

LPG can be stored in a variety of ways. LPG, as with other fossil fuels, can be combined with renewable

power sources to provide greater reliability while still achieving some reduction in CO2 emissions.

Motor fuel

When LPG is used to fuel internal combustion engines, it is often referred to as auto gas or auto propane.

In some countries, it has been used since the 1940s as a petrol alternative for spark ignition engines. In

some countries, there are additives in the liquid that extend engine life and the ratio of butane to propane

is kept quite precise in fuel LPG. Two recent studies have examined LPG-fuel-oil fuel mixes and found

that smoke emissions and fuel consumption are reduced but hydrocarbon emissions are increased. The

studies were split on CO emissions, with one finding significant increases, and the other finding slight

increases at low engine load but a considerable decrease at high engine load. Its advantage is that it is

non-toxic, non-corrosive and free of tetraethyl lead or any additives, and has a high octane rating. It burns

more cleanly than petrol or fuel-oil and is especially free of the particulates from the latter.

LPG has a lower energy density than either petrol or fuel-oil, so the equivalent fuel consumption is

higher. Many governments impose less tax on LPG than on petrol or fuel-oil, which helps offset the

greater consumption of LPG than of petrol or fuel-oil. However, in many European countries this tax

break is often compensated by a much higher annual road tax on cars using LPG than on cars using petrol

or fuel-oil. Propane is the third most widely used motor fuel in the world. 2011 estimates are that over 13

million vehicles are fueled by propane gas worldwide. Over 20 million tonnes (over 7 billion US gallons)

are used annually as a vehicle fuel.

Not all automobile engines are suitable for use with LPG as a fuel. LPG provides less upper cylinder

lubrication than petrol or diesel, so LPG-fueled engines are more prone to valve wear if they are not

http://en.wikipedia.org/wiki/Combined_heat_and_power

http://en.wikipedia.org/wiki/Internal_combustion_engines

http://en.wikipedia.org/wiki/Autogas

http://en.wikipedia.org/wiki/Hydrocarbon

http://en.wikipedia.org/wiki/Tetraethyllead

http://en.wikipedia.org/wiki/Octane_rating

http://en.wikipedia.org/wiki/Atmospheric_particulate_matter

http://en.wikipedia.org/wiki/Fuel_consumption

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suitably modified. Many modern common rail diesel engines respond well to LPG use as a supplementary

fuel. This is where LPG is used as fuel as well as diesel.

Cooking

According to the 2011 Census of India, 21.5% of Indian households or 70 crores Indian households used

LPG as cooking fuel in 2011, which is supplied to their homes by OMC’s.76.64% of such households

were from urban India making up 48% of urban Indian households as compared to a usage of 5.7% only

in rural Indian households. LPG is subsidised by the government. Increase in LPG prices has been a

politically sensitive matter in India as it potentially affects the urban middle class voting pattern.

LPG was once a popular cooking fuel in Hong Kong; however, the continued expansion of town gas to

buildings has reduced LPG usage to less than 24% of residential units.

LPG is the most common cooking fuel in Brazilian urban areas, being used in virtually all households.

Poor families receive a government grant ("Vale Gás") used exclusively for the acquisition of LPG.

Comparison with natural gas

LPG is composed primarily of propane and butane, while natural gas is composed of the lighter methane

and ethane. LPG, vaporised and at atmospheric pressure, has a higher calorific

value (94 MJ/m3 equivalent to 26.1kWh/m

3) than natural gas (methane) (38 MJ/m

3 equivalent to

10.6 kWh/m3), which means that LPG cannot simply be substituted for natural gas. In order to allow the

use of the same burner controls and to provide for similar combustion characteristics, LPG can be mixed

with air to produce a synthetic natural gas (SNG) that can be easily substituted. LPG/air mixing ratios

average 60/40, though this is widely variable based on the gases making up the LPG. The method for

determining the mixing ratios is by calculating the Wobbe index of the mix. Gases having the same

Wobbe index are held to be interchangeable.

LPG-based SNG is used in emergency backup systems for many public, industrial and military

installations, and many utilities use LPG peak shaving plants in times of high demand to make up

shortages in natural gas supplied to their distributions systems. LPG-SNG installations are also used

during initial gas system introductions, when the distribution infrastructure is in place before gas supplies

can be connected. Developing markets in India and China (among others) use LPG-SNG systems to build

up customer bases prior to expanding existing natural gas systems.

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Rural

http://en.wikipedia.org/wiki/Urban_area

http://en.wikipedia.org/wiki/Middle_class

http://en.wikipedia.org/wiki/Hong_Kong

http://en.wikipedia.org/wiki/The_Hong_Kong_and_China_Gas_Company

http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Calorific_value

http://en.wikipedia.org/wiki/Calorific_value

http://en.wikipedia.org/wiki/Natural_gas

http://en.wikipedia.org/wiki/Methane

http://en.wikipedia.org/wiki/Wobbe_index

http://en.wikipedia.org/wiki/Peak_shaving

25


Environmental effects

Commercially available LPG is currently derived from fossil fuels. Burning LPG releases CO2, an

important greenhouse gas, contributing to global warming. LPG does, however, release less CO2 per unit

of energy than that of coal or oil. It emits 81% of the CO2 per kWh produced by oil, 70% of that of coal,

and less than 50% of that emitted by coal-generated electricity distributed via the grid. Being a mix of

propane and butane, LPG emits less carbon per joule than butane but more carbon per joule than propane.

LPG can be considered to burn more cleanly than heavier molecule hydrocarbons, in that it releases very

few particulates.

http://en.wikipedia.org/wiki/Global_warming

http://en.wikipedia.org/wiki/KWh

http://en.wikipedia.org/wiki/Joule

http://en.wikipedia.org/wiki/Hydrocarbons

http://en.wikipedia.org/wiki/Atmospheric_particulate_matter

26


LPG MARKET IN INDIA

Demand Supply Scenario:-

TOP 5 CONSUMERS-DOMESTIC

LPG DEMAND AND GROWTH

India is fourth largest LPG consumable after USA, China and Japan.India is also third largest

consumable after China and USALPG in India is largely a regulated market. Pricing and allocation of

distributor bodies is decided by corresponding bodies. Demand for LPG in year 2012-13 was 14.8 MMT

Indigenous Production in 2012-13was 9516 TMT Imports @29% of total LPG Demand. This supply

consisted of 55% from PSU OMC’s, 25% from Essar and RIL and remaining 20% from imports. In year

2012-13 demand stood at 90-95% of supply. On January 1, 2013 there were 181 bottling plants across

India 49 % owned by IOCL, 27 % by HPCL, 25 % by BPCL. Bottling plants had capacity of 8987

MMTPA as on April 2012.There were 9366 distributers of LPG on same date with 73 % presence in

urban area and 27% in rural area. Demand for LPG is growing at rate of 6 % per annum where supply is

not constant and gap is filled by imports.

China USA India Japan Mexico

17180

14873

11270

7605 7027

Growth

7-8 8-9 9-10 10-11 11-12 12-13

10052 10531

11333 11778

12746

13700

Growth

27


Consumption of Major Petroleum Products in India

(During 2012-13)

( ' 000 Tonnes)

States/UTs/

Outside

Territories

Nephtha LPG MS SKO ATF HSDO LDO* FO LSHS/HHS

Lubes

&

Greases

Others Total

Andhra

Pradesh 102 308 340 641 44 2989 28 319 107 47 213 5138

Arunachal

Pradesh 0 4 14 14 2 57 1 0 0 2 4 98

Assam 5 65 54 268 51 355 2 69 25 9 127 1030

Bihar 57 125 157 652 7 1609 136 378 67 45 148 3381

Delhi 0 332 476 243 649 1242 49 36 27 27 99 3180

Goa 253 21 34 28 26 189 5 161 0 5 15 737

Gujarat 590 313 416 829 67 2763 185 506 1669 43 970 8351

Haryana 0 133 150 172 30 1533 47 251 232 19 108 2673

Himachal

Pradesh 0 36 27 46 0 207 3 12 8 4 20 362

Jammu &

Kashmir 0 41 48 121 14 207 7 11 1 4 28 482

Karnataka 168 209 338 510 87 2007 21 379 131 36 125 4011

Kerala 169 142 233 289 65 1309 6 199 214 26 162 2814

Madhya

Pradesh 4 199 225 514 27 2072 24 305 49 35 271 3725

Maharashtra 749 733 759 1563 547 4041 322 1386 947 131 766 11944

Meghalaya 0 6 19 20 0 100 0 0 0 2 8 155

Manipur 0 8 9 22 1 26 0 0 0 0 17 83

Mizoram 0 6 6 8 0 21 0 0 0 0 6 47

Nagaland 0 5 10 15 1 27 0 0 0 1 5 64

Orissa 127 44 76 235 11 683 27 309 12 19 79 1622

Punjab 49 182 336 358 70 1960 22 411 386 28 189 3991

Rajasthan 317 159 205 356 45 2353 39 117 110 24 206 3931

Sikkim 0 2 0 12 0 10 1 2 0 0 2 33

Tamil Nadu 458 345 373 696 150 2983 47 903 180 71 288 6494

Tripura 0 5 6 29 6 36 0 0 0 1 6 89

Uttar Pradesh 919 506 408 1160 96 4166 88 466 144 55 337 8345

West Bengal 47 216 157 793 126 1757 150 271 0 60 249 3826

States 4014 4145 4723 8801 1996 32945 1060 6491 4309 694 7431 76609

Andaman &

Nicobar Islands 0 1 2 5 3 48 0 0 0 1 1 61

Chandigarh 0 22 46 19 28 55 4 6 6 2 16 204

Dadra & Nagar

Haveli 0 2 4 3 0 67 2 7 0 3 2 90

Daman & Diu 0 1 4 5 0 15 1 3 0 0 3 32

Lakshadweep 0 0 0 0 0 5 0 0 0 0 0 5

Pondicherry 0 9 13 15 0 114 1 25 0 4 7 188

UTs 0 36 69 47 31 304 8 41 6 10 29 580

Bhutan 0 2 2 5 1 15 1 3 0 0 6 35

Nepal 0 0 0 0 0 0 0 0 0 0 0 0

Outside

Territories 0 2 2 5 1 15 1 3 0 0 6 35

India 4014 4182 4794 8853 2028 33264 1069 6536 4315 704 7466 77224

Source:-Indiastats.com

28


Tabular

distribution of

Type of Fuel Used

by households

(Source:-Census

India 2011)

2001 2011

Total Rural Urban Total Rural Urban

Firewood 100,842,

651

88,687,850 12,154,801 120,834,388 104,963,9

72

15,870,41

6

Crop Residue, Cow

dung, Coal, Lignite,

Charcoal

41,946,4

66

37,289,745 4,656,721 45,023,278 40,248,37

2

4,774,906

Kerosene 12,528,9

16

2,262,078 10,266,838 7,164,589 1,229,476 5,935,113

LPG/PNG 33,596,7

98

7,918,755 25,678,043 70,422,883 19,137,35

1

51,285,53

2

Any Other 2,418,87

9

1,957,592 461,287 2,450,564 1,852,952 597,612

Geographical depiction of the Indian LPG infrastructure shows 17 well spread out Refineries with

a capacity to produce 5.5 million tons of LPG per annum and 11 Fractionators in and around the gas

fields and the natural gas pipelines producing another 2.2 million metric tons of LPG. It also has 7

logistically located LPG Import Facilities, capable of handling up to 5 MMTPA.

The world’s largest LPG pipeline of 1250 Kms moves product from the west coast to the land locked

northern region and is capable of handling 2.2 Million tons per annum

On the downstream side, it has a network of over 400 bottling plants with a capacity to bottle around 11

MMTPA of LPG and well supplemented with Road and Rail Tankers to move product from supply

sources to bottling plants.

Country’s first 60,000 Mts Cavern Storage facility is under construction by a Joint venture company of

HPCL and Total Elf Fina, which would further augment the import infrastructure.

With the above infrastructure, the country is fully equipped to handle the demand for the next 5 years.

29


LPG is distributed in following markets:-

The LPG is being distributed in cylinders of various sizes

Domestic: - 5kg and 14.2 kg.

Commercial: - 19 kg.

Industrial: - 35 kg,47.5 kg

LPG for domestic customers is supplied at a subsidized rate and for industrial and commercial rate is

market determined. These differences in pricing scheme often lead to black marketing but companies are

now a day’s vigilant enough to inhibit this practice.

30


Major Players in LPG Market

In India, share of LPG retailing largely depends on LPG producing capacities of its refineries.

IOCL has largest number of refineries and largest capacity for producing LPG. It leads market with 52 %

market share, 25 % by HPCL & 23 % by BPCL.In PMC’s major players are RIL and Essar. These two

companies generate 90-95 % revenue from commercial sale. The combined LPG production capacity of

RIL and Essar is 3 % of total indigenous production LPG production capacity of India.

52%

25%

23%

Number of Distributors

IOCL HPCL BPCL

63

38

35

IOCL

HPCL

BPCL

0 10 20 30 40 50 60 70

Number of LPG customers (in million) as on 1.04.2013

31


COMPETITIVE ENVIRONMENT

Business Rivalries

There are mainly two categories of competitions existing in Indian LPG industry. They are as follows:

1. Inter OMC competition

2. Inter OMC-PMC competition

Inter OMC competition:-

OMC’s is India is seen as the facilitator to the nation’s development. Hence, apart from churning profit

for sustainable existence and growth, it has to operate in accordance with the nation’s interest.

That’s why OMC’s are regulated such that to avoid unwanted friction among themselves and concentrate

their whole energy to nation’s cause. So, there exists a special type of competition among the

OMC’s of India.

In domestic segment, OMC has to sell its product at a price decided by the government. So, there exists

no scope of price war, which leaves the OMCs to compete on market share. But, to avoid unwanted

friction and hence deadweight loss to the society, the regulatory body, MOP&MG tries to maintain the

optimum number of dealers in an area. In order to that the number of dealerships of a company is decided

by the committee in accordance to their market share and presence in the region. Hence, chances of

competition for market share in domestic segment are also very limited. Though, in industrial segment,

with lack of price regulation and hence better scope for margin there is an intense competition in the

form of:

1. Price

2. Service

3. Promptness in delivery

4. Hours of catering or working hours

OMC-PMC competition

PMC, due to subsidized price prevailing in the domestic segment has not shown any interest to compete

with the OMCs. But, in industrial segment it is giving OMCs run for their money.

Threat from Substitutes

Today, PNG is considered to be most eligible fuel to replace LPG. Few, properties of PNG which

are regarded as giving it an edge over LPG are follows:

PNG is Convenient

32


24 hours uninterrupted gas supply

No changing or handling of gas cylinders

No more last minute emergency

Make payments after you consume, through banks, drop boxes, ECS, Net, etc.

PNG is economical, works out to be up to 10% cheaper than LPG,

14.2 kg. LPG is equivalent to 18 units of Natural Gas shown in meter. At present, price of LPG

is Rs. 455/- but weconsume Gas costing Rs. 205/- only, saving Rs. 250/- (approx.) every time.

PNG is Safe:

Natural Gas catches fire only when it forms a 5-15% mixture with air whereas LPG catches fire when it

forms 2% or above mixture with air.

Supply designs, executions and operations are being done as Per International best Practices.

PNG is Clean:

Being a gaseous fuel, very clean compared to any other fuel with more than 94% combustible

particles.

Burns with a flame always hence, no blackening of vessels.

Sulphur content less than 10 PPM. Most preferred fuel in vehicles in Mumbai today.

Contribution for a cleaner society.

PNG is versatile:

Apart from cooking, other appliances like geyser, air conditioner, vehicles etc. can be used on

Natural Gas.

33


CHALLENGES OF LPG BUSINESS

Supply & accessibility

In order to meet the increasing demand of LPG by domestic as well as auto fueling sectors the country

needs additional LPG production capacity, adequate transportation (pipelines & rail tank wagons), and

distribution network.

During the calendar year 2008, the actual sale of LPG was 11820 TMT against the total

indigenous LPG availability of 9228 TMT. The shortfall was made up by importing LPG to the tune of

2759 TMT. For the year 2014, Total LPG imports of 3112 TMT have been planned against the projected

demand of 12570 TMT at a growth of 6%.

Supply of reliable cylinders

Another challenge pertaining to LPG distribution is assuring the reliable supply of refill cylinders.

For small and remote markets, refills may be delivered once a week or once every other week. For those

users that do not keep a second cylinder, this could mean going without fuel for as long as two weeks.

Signing up for two cylinders to avoid running out of cooking fuel would further increase the start-up cost

of LPG service. Again, this infrequent delivery of refill cylinders serves as a disincentive against

switching entirely to LPG.

Cylinder management

As we know that LPG has to be stored under pressure, metal cylinders are required. To cover the cost of

cylinder manufacture, an initial deposit fee is required. The combination of the start-up cost and the

cash outlay at each refill (which typically cannot be broken up into smaller installments) presents

a serious barrier to the uptake and regular use of LPG by low-income households.

Import challenges

The LPG import requirement during the year 2013was estimated to be about 7.7 MMT. The

stretched import capacity of the industry at present is about 414 TMT/month which equals to

approximately 5.0 MMTpa. International factors such as seasonal variations, changes in international

politics cause the problems.

Diversion of LPG cylinders

The reason for diversion of domestic cylinders by distributors is because the domestic LPG is

subsidized. The selling price of domestic cylinders is less as compared to the commercial cylinder

selling price which is fixed on the actual Import parity price. There is a wide difference between the

34


domestic and commercial rates. Due to this most of the supply intended to go to domestic consumers

are transferred to commercial consumers which results in shortage for above said consumer base.

Affordability

The economically disadvantaged face the problems of high first costs of LPG (connection and

equipment), and the lumpiness of relatively high refilling bills, and loans are difficult to service without

financial returns from the investment.

On comparing the fuel rates for different fuels, we see that the expenditure occurred for using LPG is

much more costly as compare to others. For example LPG stoves are required to be designed to

operate at 60 percent efficiency or higher, field measurements show efficiencies considerably lower

than the design specifications. If we assume 50 percent stove efficiency for LPG, 35 percent for kerosene

in wick stoves, and 40 percent for kerosene in high-pressure stoves (where kerosene is gasified before

combustion).a 14.2 kg cylinder of LPG is equivalent to 21 litres of kerosene as liquid and 19 litres

gasified kerosene. Expressed in rupees per mega-joule (MJ) of energy delivered, LPG is more

expensive than kerosene for low income group population.

Pricing policies

These are a challenge, particularly because of the subsidies already offered. The subsidies do not reach

most of the poor as they are not yet users of LPG, there is diversion of subsidized LPG from domestic to

other uses, and there is also a heavy burden on the central exchequer.

As per the Subsidy Scheme notified by the Government, OMCs are only allowed to market

subsidized domestic LPG. The present total subsidy on domestic LPG marketed by OMCs is:-Rs.7.94

per Kg (Rs.112.77 per 14.2 Kg cylinder).

Of this, Government is paying Rs.2.86 per Kg (Rs. 40.65 per 14.2Kg cylinder) and Oil Companies are

incurring loss of the balance Rs.5.08 per Kg (Rs.72.12 per 14.2Kg cylinder).

Out of the loss incurred on domestic LPG sales, as per the subsidy sharing mechanism, ONGC, GAIL

are sharing 1/3rd and the rest is borne by OMCs. If producers like RIL, ONGC, GAIL and OIL are to

be allowed to market subsidized domestic LPG, they would have to follow price regulation and

bear losses. Again, LPG producers, especially private producers, may not be interested in selling

subsidized domestic LPG under the subsidy scheme. It also possesses a challenge for the government to

ensure the supply of subsidized product to domestic consumers & prevent its diversion to non-domestic

purposes.

35


DISTRIBUTION CHAIN OF LPG

36


LPG DISTRIBUTION OF HP-GAS

From the storage facilities, LPG is directly distributed to bulk industrial purchasers via large bulk

road tankers. For the domestic customers, LPG is distributed in packed form through dealers. Dealer

holds the stock of filled cylinders. When the customer’s LPG cylinder is emptied, it is replaced by the

local operating dealer at the customer’s location itself. The dealer recovers the cost of transporting

cylinders from commission on a per refill basis. A group of dealers in a given area receive the filled

cylinders from the designated bottling plant. A dealer sends the empty cylinders to the required bottling

stations via truck. These bottling plants take back the empty cylinders and load the truck with the filled

LPG SUPPLY CHAIN

37


ones. The filled cylinders are then sent back to the dealer. The various bottling plants in turn receive the LPG

from storage facilities with the use of pipe lines and tankers.

Process of refilling cylinder

38


CUSTOMER RETENTION TECHNIQUES

The LPG business is mostly self-propelled and doesn’t need much marketing measures. In the

domestic category, the distributor represents the company and mostly the consumer chooses that

distributor which is closest to his/her locality. Though there are a few factors which improve the service

level of the business:

Again, few OMCs started taking measures to improve consumer satisfaction by providing home

delivery service of household goods by collaborating with various companies for providing cooking

items like ISI stoves,frying pans,tea powder and other retail goods called as Allied Retail

Business(ARB). The commission is shared amongst the distributor and the company in the ratio of

70:30.

For the industrial and consumers the reliability of providing the LPG cylinders in normal as well as

emergency times is of utmost priority, as the opportunity cost is huge in industry. Another important

aspect is the price of LPG, as the prices charged by the company is not regulated and hence can be

tinkered with

JI HAAN

IVRS,DCMS

PREFFERED TIME

DELIVERY

TRACK YOUR REFILL

HP ANYTIME

FAST, CORRECT

AND CONVINIENT

REFILL

STAFF BEHAVIOUR

39


PLANT OPERATIONS

OPERATIONS OF THE PLANT:

Following activities are to be carried out by the skilled manpower at the Plant as part of Operations:

1. Bulk LPG receipt by pipeline, round the clock

2. Bottling operations inthree shift

3. Road tanker loading/unloading operation

Major scope includes receipt of bulk LPG by pipeline, storage of product, receipt of empty

cylinders from dealers/repairers, new cylinders from manufacturers, cylinder bottling operations,

receipt/dispatch of bulk LPG by road tankers to customers/other LPG Plants, dispatch of filled

cylinders to dealers, receipt/issue of regulators and allied equipment to dealers, and all activities

connected with operation, maintenance and safety of the Plant.

Pipeline receipt and bottling operations shall be on 6-day week basis. Public/National Holidays will

be limited to a maximum of 12 days.

A. RECEIPT OF BULK LPG

Regular mode of bulk LPG receipt is by pipeline. However, there may be some occasional receipt by

road tankers too.

40


Bulk LPG Receipt by Pipeline

In case the product is received by pipeline from Refinery, Shift Supervisor has to co-ordinate with

Refinery coordinator for the expected time of receipt of product, flow rate, expected time of

completion etc. During the course of pipeline transfer, continuous interaction has to be maintained

through walkie-talkie/telephone or any other means, with the HMEL Refinery personnel. Quantity of

product received shall be basis the Custody Transfer Flow meter. Initial & final readings of quantity,

density and other parameters from the flow meter shall be jointly recorded with the Refinery Co-

coordinator, before and after each transfer. After each pipeline transfer, Shift Supervisor shall

compare the metered quantity with the actual quantity received and any abnormal variation beyond

acceptable Industry norms shall be brought to the notice of HPC. In case of any dispute, HPC shall

take up with the Refinery, however the outcome of such exercise shall be binding on the

Contractor/Agency.

Shift Supervisor has to maintain records as per HPCL prescribed format for Pipeline Transfer

operations.

B. STORAGE OF BULK LPG

Storage of bulk LPG will be in the Mounded Storage Vessels provided in the Plant. Gauging of the

storage tanks are to be carried out by the Shift Supervisors every day at start and close of Operations

(Opening & Closing gauges). Gauging of tank comprises of recording of level, density, pressure &

temperature and the readings are to be recorded in gauge books as per prescribed format of HPCL.

Storage Vessels are provided with two types of gauging systems for product level, viz., Servo and

Radar systems. While readings from both the gauges are to be recorded in the gauge books, stock

calculations will be based on the Radar gauge. Servo gauge shall be only for cross checking purpose,

and in case of any difference, both the gauges are to be checked and calibrated.

All the gauging equipment’s as well as temperature & density measuring instruments must be

calibrated periodically as required and must have valid calibration certificates at all times.

At the end of the day, stock loss/gain for the day’s operations is to be calculated & logged. Presently,

the stock calculations are integrated with ERP system (JD Edwards) and has to make all such entries

necessary for making the stock calculations.

41


Water draining from the Storage Vessels has to be regularly carried out by the skilled worker as per

HPC’s procedure, taking all safety precautions.

C. BOTTLING OPERATIONS

Receipt of Cylinders

a. Shift Supervisor/worker shall receive empty cylinders from HPC, their distributor network and

Manufacturers/Repairers authorized by HPCL. All the cylinders so received shall be checked

and identified as per IS:13258 under the following categories:

i) Good/usable cylinders

ii) Cylinders due for mandatory testing

iii) Cylinders requiring cold/hot repairs

iv) Defective and leaky cylinders

v) Spurious cylinders

vi) Cylinders not belonging to HPC

Shift Supervisor shall maintain necessary record of the cylinder receipts as per HPCL’s

directive.

b. In case of spurious/non-HPC cylinders, immediate information shall be given to HPC Officer

and necessary action to be taken on his advice. Proper records with acknowledgement from

Parties bringing such cylinders will have to be maintained by the Shift Supervisor.

42


c. Cylinders due for mandatory testing shall be stacked separately.

d. Repairing of defective and leaky cylinders (with Valve & Pin leak) shall be carried out before

taking the cylinders for filling.

e. Cylinders requiring hot repairs shall be kept separately and dispatched to outside Parties as per

advice of HPC.

Purging of Cylinders

Worker shall carry out purging of the following types of cylinders received. Purging shall be

carried out according to laid-down procedure in that regard.

(i) New cylinders received at the Plant

(ii) Cylinders tested inside the Plant

(iii) Cylinders received after mandatory testing/hot repair

Filling of LPG Cylinders

a) Worker shall fill good and usable empty cylinders conforming to IS-3196 to the extent of the

capacity of each such LPG cylinder. Variation in the net product weight shall be within the

following limits for respective cylinders:

43


5.0 Kg cylinders 50 gm





b) All filled LPG cylinders which contain less/more quantity of product than as mentioned in

(a) above and shall be filled/evacuated so as to bring them to the prescribed standard weight.

c) All filled cylinders shall be checked for any Pin leak, Bung Leak, O-ring leak and Body leak with the

help of equipment provided, as per the specifications, and segregated for repairs as follows:

Pin leak: Evacuation of product, depressurization and replacement of valve

Bung leak: Evacuation of product, depressurization, removal of valve, cleaning the bung

threads and refixing the valve

O-ring leak: Replacement of O-ring

Body leak: Evacuation of product, depressurization, removal of valve,degassing and

segregation as scrap

d) The repaired cylinders shall be rechecked for any defects and if OK, sent for further

operations. If found leaky, they are to be repaired as mentioned in (c) above.

e) All filled cylinders passing the QC tests shall be capped, sealed, fixed with neck labels and

sent for market dispatch or stacked in Storage Shed as required.

f) Over and above the 100% Quality Control Checks carried out as above, Statistical Quality

Control shall be carried out on 2% of filled cylinders ready for dispatch, and records

maintained.

During SQC following checks are to be done and records as per HPCL format has to be

maintained:

44


i) Checking of gross weight of the cylinder and noting the difference of net weight of

LPG from the specified weight (14.2 Kg/ 19.0 Kg/ 35.0 Kg / 47.5 Kg) and

segregating the cylinder in case of variation of weight in comparison with

allowable limit as mentioned in clause no a).

ii) Checking of cylinder for any valve leakage or pin leakage by using CVT and

segregating the cylinder in case any leakage is observed.

iii) Re-sealing of checked cylinder in case found OK in SQC.

g) The Quality Control equipment used in Filling operations, viz., Check Scale, Adjustment

Scale, Pin/Bung Leak Detector, O-ring Leak Detector, SQC Check Scale, etc., shall be

frequently calibrated (at the start of the shift and in between if required), without interrupting

the operations. Water in the Test bath and Washing Unit shall be replaced as and when

necessary (at least once in a shift) for ensuring clear water/good visibility.

h) Data collection system is provided for collection and analyzing the data on Filling operations.

Necessary monitoring, data analysis and corrective actions need to be taken on regular basis

for ensuring quality. Regular reports/graphs on the same shall be submitted to HPC in required

formats.

Dispatch of Filled LPG Cylinders

a)Worker will be responsible regarding dispatch/ delivery of filled LPG cylinders as per

advice.

b)Filled cylinders so dispatched should be in sound condition with correct weight and should

not have any leaks. The cylinder should meet IS 3196 and should be capped, sealed and

provided with neck label and the tare weight shall be clearly visible.

c)Shift Supervisor/worker shall facilitate loading/unloading of LPG filled/empty cylinders

from trucks. The unloading/loading of cylinders from and into the truck will be done by the

crew of packed transporters arranged by HPC.

d)In case if any of the cylinder so filled at Plant meets with any accident enroute, on truck, at

dealers premises, during delivery to customers or at customers’ premises, Shift

45


Supervisor/workers will render all assistance for investigation and establishing the reasons for

the accident.

Storage of Filled LPG Cylinders

a. If there is no truck availability for loading of good filled cylinders, the cylinders shall be

stacked in the Filled Cylinders Storage Shed within the earmarked place as per rules

prescribed.

b. In no case, cylinders not qualifying for dispatch to markets shall be stacked in the Shed and

agency will ensure that such type of cylinders are corrected immediately when noticed.

Mandatory testing & painting of Cylinders

Plant is provided with equipment for mandatory testing and painting of cylinders.

HPC shall place a separate order for mandatory testing and painting of cylinders at the Plant.

Manpower provided by the operator shall facilitate execution of the work as per detailed procedure

and promptly bring any deviations with respect to the tested cylinders, to HPC’s notice.

Receipt & Storage of Regulators & Valves

a. Worker shall receive and store the new regulators and valves supplied by manufacturers and

defective regulators returned by dealers. Worker shall deliver the new regulators to HPC

distributors as per HPC’s advice in that regard. Proper records shall be maintained by the

agency for the regulators and valves received, stored and dispatched and the balance stock at

the Plant. Defective equipment shall be stored and accounted for separately.

b. Defective Regulators returned by the dealers shall be checked for defects as per HPC’s

standard procedure and then only accepted.

46


c. Spurious/non-HPC regulators shall be immediately reported to resident HPC Officer and

necessary action taken as per his advice. Proper records with acknowledgement bringing such

regulators shall be maintained. Based on HPC’s advice, necessary debit notes will have to be

raised by the Operator. In case of any delay in informing HPC of the receipts (or) regulators

found with no proper records, Operator is liable to penalties at applicable rates.

d. Defective Valves generated in the Plant shall be salvaged by the Operator as per HPC’s

standard procedure. Good valves shall be reused and defective valves stored separately.

47


CHARACTERISTICS OF RURAL LPG MARKETS

This section of the report provides a general description of some of the major characteristics of

supply of LP Gas to rural households, especially those to be found in the less developed and more remote

regions of the world. Many characteristics are considered, from geographic, to profile of households,

cultural issues, governmental, political, regulatory and economic.

(Source:-CensusIndia2011)

Key Characteristics:-

Location and Density

Probably the first and most obvious characteristics of rural LP Gas distribution are the location of

households, the topography of the locations and the density of dwellings per square kilometre. Rural poor

households are found in limitless settings, from being clustered in small hamlets to isolated homes

perched on mountain sides or scattered across deltas at major river mouths or wetland regions where

river-craft provide the primary link to the outside world. Remote or difficult locations challenge the

ability to deliver, and low densities preclude economies in investment. Each of these particular local

situations will call for their own special local LP Gas supply solutions and in many circumstances these

will be an innovative blend of modern and traditional supply arrangements.

Dwelling Type and Occupancy

The types of dwelling present another set of factors for consideration. They may be permanent

structures made from brick, wattle or mud or temporary structures often favoured by nomadic cultures.

0

20000000

40000000

60000000

80000000

100000000

120000000

Firewood Crop Residue, Cowdung, Coal, Lignite,

Charcoal

Kerosene LPG/PNG Any Other

DISTRIBUTION OF TYPE OF FUEL USED BY RURAL HOUSEHOLDS

2001 2011

48


Perhaps they are made of wood and local vegetation adapted for household construction. The storage and

use of LP Gas in these different settings will require their own unique household supply and utilisation

solutions. Within dwellings live households. The nature of such households also needs to be understood

in terms of the occupants and the number of adults, children, parents, grandparents and extended family

members. Household income, literacy levels and livelihoods are also a factor in the ability to adapt to LP

Gas utilization. Most important will be a full understanding of the household’s thermal energy needs,

such as cooking, baking, heating water and space heating, and the frequency of these energy needs so as

to match the supply to each household demand and determine cylinder sizes, storage and delivery

regimes. Literacy levels and determining the primary LP Gas user in the household are also of vital

importance in terms of safety notices on cylinders, efficient use of LP Gas appliances and the physical

human capabilities available for cylinder handling and use.

Access

There is another cluster of characteristics around the question of access to households. Is the only

way to access the rural householder in situ at the dwelling or do they gather in local community gathering

points or visit local villages or commercial centres where central distribution facilities could be

established? Is there local radio, a messenger service postal services, telephones or cell phone services?

Managing regular access to the key householders for communications such as promoting the product,

receiving LP Gas sales orders, delivering/collecting cylinders and receiving payment are basic necessities.

While in developed regions, all these things are relatively straightforward, in remote developing locations

nothing can be taken for granted.

Storage, Handling and Transport

This vexing issue also faces the rural LP Gas supplier. There is an inherent economic conflict

between locating cylinder storage depots as close as possible to the user, versus the potential economies

of scale afforded by large centralised bottling and cylinder storage sites. When serving households

scattered over many square kilometres, the logistics and economics of the last few steps in the supply

chain become critical.

Cultural Factors

Local cultural factors must also be embraced within LP Gas distribution arrangements - the values

of local communities, together with local religious interests can often create barriers to new suppliers

from outside the community. Gender is another factor that in certain cultures clearly distinguishes certain

roles between women and men. Since a primary use of LP Gas is for cooking, the preparation and serving

49


of food will almost always have a variety of associated cultural factors that must be fully understood and

respected.

Suppliers’ Commercial Viability

In addition to infrastructure, another significant characteristic of rural markets are the economics

of supply and whether private companies can operate commercially. Many factors interact to make this a

particularly challenging aspect of rural LP Gas distribution. Long supply lines, costly cylinder handling

chain, high cylinder supply and maintenance costs all contrive to make the economics especially

challenging. Small supply volumes required by individual households will often require aggregation into

viable quantities to economically support rural distribution infrastructure investment. High poverty levels

that frequently characterise rural households in developing regions present the challenge of affordability

and the need to have low comparative LP Gas prices. The disposable income of households and their

ability to purchase LP Gas will need to be carefully addressed. Also payment methods or revenue

collection procedures will need to be highly innovative to comply with local economic conditions.

Competition

In these communities, competition also exists in many different forms. The most obvious will be

the availability of cheaper or zero cost (excluding the value of time and labour) fuel alternatives such as

wood, cow dung and agricultural waste. In addition, in many regions coal, paraffin and renewable energy

sources also compete for rural household energy expenditure. All of these alternative and competing

energy sources will need addressing in the marketing, LP Gas promotion and switching strategies

employed locally by LP Gas suppliers. As well as competition between different energies there is also

competition from other products and services. The expanding use of cellular phones in rural areas will

compete with expenditure on fuel. Soft drink companies that have widespread coverage are another

competitor.

The fact is that there are a growing number of commercial competitors for the scarce disposable incomes

of rural households.

Energy Efficiencies

In the whole matter of comparative energy costs and affordability, one must never lose sight of

varying process efficiencies for different thermal applications and fuels. It is always essential to ensure

that, like is compared with like, and that fuel efficiency is factored into all fuel cost calculations and

comparisons. While this is a highly complex and specialised area of debate, providing the efficiency is

50


also embraced within comparative fuel cost comparisons, then LPGas will receive a fair hearing and be

properly represented.

Switching Strategies

Strategies will need to be developed and deployed to convert rural households to regular LP Gas

usage. No fuel is without cost. Wood has to be collected, stored and the ash disposed of; all labour

intensive activities. The time that will be saved by using LP Gas is a major benefit to potential users that

will need to be carefully explained and demonstrated. There are also less apparent costs such as indoor

smoke pollution, dirt, health impacts and slow and inefficient cooking using traditional fuels. User

education programmes will be required to win household users to LP Gas and they will need to deploy all

the competitive benefits of LP Gas over competing alternative local fuels. Another important element will

be the availability and affordability of fit-for-purpose LP Gas cylinders and household appliances.

Common sense and attention to detail in meeting the thermal energy needs as perceived and understood

by the users (rather than the supplier) are crucial in devising effective switching strategies.

Key Barriers to Rural Household Distribution

A barrier to LP Gas supply to rural households is a circumstance that inhibits the successful market

transaction between product suppliers and consumers. From a supply side perspective, a barrier may be

insufficient LP Gas to supply a large new market. Another barrier might be a lack of sufficient profit

margin or insufficient return on asset investments for LP Gas supply companies and distributors. From a

government perspective, a possible barrier may be failure to implement local energy policy or inability to

secure necessary resale taxes. Critical demand side barriers might include user concerns such as

unaffordable LP Gas prices and non-availability of low cost appliances. In terms of community factors, a

barrier may be the loss of livelihoods in traditional fuel supply or the lack of patronage from local leaders

or elders.

The following discussion reviews the types of barriers from a number of different standpoints in an

attempt to gain a greater appreciation of the type and nature of barriers to sustainable LP Gas supply to

rural households. Following the presentation of a list of barriers, they are then presented in a barrier

framework within dimensions of affordability, accessibility and acceptability each from a supply and

demand perspective. The section also provides a number of direct quotations from the various respondent

questionnaires that directly support the list of identified barriers.

51


“High price of LP Gas is the main barrier to entering the rural market. This case favours other alternative

fuels like coal, wood and electric. Second, rural households are much more connected to their traditions

so local companies or familiar dealers are preferred. In some rural areas, LP Gas consumption is not big

enough to generate sufficient profit. Thus, we are not giving dealerships in these areas. Since rural

households have some economic problems, they cannot accept standard payment and prefer to pay by

long-term instalment. This is also a barrier for entering rural markets. Alternative fuels especially natural

gas will be the biggest threat for LP Gas market”

---World LPG Association

Barriers to Successful Rural LP Gas Distribution

Economic Barrier

Uneconomic business cases are perhaps the most fundamental barrier to rural delivery. Here the

high costs of rural distribution, low revenue, poor profit margins and unattractive investment have kept

back the growth of the rural LP Gas market. The crucial question must be, can a commercial LP Gas

supply company make a suitable profit, and thereby a competitive financial return on investment, when

supplying rural households? Unless this barrier can be overcome successfully, all the remaining barriers

in this section are irrelevant. So what must we understand about the nature of this economic barrier?

There are three crucial elements, namely:

• High costs of rural LP Gas distribution.

Common factors that generate excessive operating costs to rural households include attenuated supply

chains, long distances and high transport costs, poor road networks, dispersed and inaccessible customer

base, high revenue collection costs; need for massive investment in smaller cylinders; and higher cylinder

maintenance costs.

• Low revenue.

Rural households typically consume small quantities of LP Gas in comparison with industrial and

commercial users. Such households are also typically dispersed over large areas. In addition many rural

households are poor with limited disposable income. All these factors conspire to reduce revenue levels.

52


• Poor profit margins and unattractive investment.

Rural distribution of LP Gas to dispersed households traditionally generates low or comparatively

poor profit margins when compared with other LP Gas market sectors. This negatively impacts the

attractiveness of rural LP Gas distribution as an investment destination for commercial funds.

‘Rural residential market looks unattractive to our company now because of the small percentage and also

because it is not easy to penetrate into rural areas at today’s high record selling price’

-China

Demand Side and Community Related Barriers:-

Cheaper Fuel Alternatives and Affordability of LP Gas

Many poor rural households use wood or waste biomass that have a low or negative cost to the

users. In addition other thermal fuels such as coal and paraffin are often cheaper than LP Gas. There is

little or no financial incentive therefore for such users to switch to LP Gas.

In many countries the full market or economic cost of LP Gas is higher than alternative thermal fuels.

This negatively impacts both the incentive for poor households to switch to LP Gas and the ability to pay

for a more expensive thermal fuel from limited disposable income of the poor.

High cost of appliances

In comparison to a cheap paraffin stove or a simple iron grid to stand pots on for wood or a coal

open fire, the comparable LP Gas cooking equipment is both more sophisticated and therefore more

expensive. Poor rural households by definition have very limited disposable income. Without the money

to afford LP Gas appliances they will remain enslaved to their traditional cooking methods and

implements that incur no additional direct costs or burden on their limited finances. Without the necessary

fuel appliances that enable LP Gas to be transformed into useful energy for cooking, water heating, space

heating and lighting there will be no demand for LP Gas.

High customer switching costs from other fuels

Because it costs more to purchase the necessary LP Gas appliances than many of the appliances

and equipment necessary for other fuels, rural households will be hesitant to ‘lavish’ scarce money on LP

Gas appliances. They have also already paid for their existing appliances. Rural householders also need to

be persuaded and educated in the use of LP Gas. There are therefore a number of ‘switching’ costs

53


involved in winning first time users to LP Gas and these costs that may need to include appliance

subsidies, special pricing incentives, customer education and marketing expenses all contribute to high

customer switching costs from other fuels.

The main barrier and challenges are high household switching cost from other fuels and cheaper fuel

alternatives. The challenge facing our organisation is to run it in a manner that will be both profitable and

sustainable.

-South Africa

Lack of Awareness

Traditional households, especially those in remote rural areas in most cultures, often cling to

tradition and are the slowest to adopt new technologies and modern living practices. Certainly in Africa

there is in many countries a low awareness among households about alternative modern fuels, including

LP Gas. This lack of awareness also exists with Government officials, entrepreneurs, women’s groups

and others who influence switching rural households to LP Gas.

Awareness must precede any desire to switch to LP Gas. Without awareness of LP Gas, practical

knowledge of the product and especially an appreciation of the comparative benefits, it will be impossible

to sell LP Gas to rural householders.

Rural Traditional Cooking Methods

Very often, in traditional rural areas, the open fire using wood or coal for cooking has cultural,

gender and lifestyle values. Certain staple foods such as maize, yams, pulses require slow cooking, well

suited to traditional open fires. In Africa, the collection of wood by women is viewed as a gender value

and a pile of wood outside a kraal or hut signifies a diligent mother caring for her family. In terms of

lifestyle, the open fire serves several purposes apart from just cooking such as space heating and clothes

drying in winter months. For reasons such as these there is usually a significant loyalty to traditional

cooking methods and therefore the fuels used.

Low Literacy Levels among Rural Householders

Unlike many urban households there is often a low literacy level among rural householders. This

is certainly the case in India and Africa. Low literacy presents a range of constraints on introducing and

sustaining the safe and efficient use by householders of a new thermal fuel such as LP Gas.

Limited Media and Reach

In many rural developing regions of the world there is an absence of modern media such as

newspapers and TV coverage.

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This is a particular problem in India and parts of Africa. With limited media and that media that does

exist having a limited reach to the target rural household market creates a barrier for supply companies

wishing to market and promote their product.

Diversity of Local Languages and Cultures

This is nowhere better exemplified than in South Africa where there are 11 official languages.

Alongside different languages there are different cultures and traditions. Since the home is the crucible of

tradition, local language and culture and it is in this precise environment where LP Gas is to be used, the

diversity of language and culture can readily become a barrier to marketing and fuel usage switching.

Low Disposable Income of Rural Households and Ability To Pay

By definition this project focuses on rural households and these are more generally poor

households with very limited and scarce disposable income. Not only is income very scarce it is also

often sporadic, linked to crop cycles and seasonal work. Thus, serious constraints exists on many rural

households’ ability to pay, both in actual prices required for appliances, but also the regularity of

payments necessary for a reliable supply of cylinder refills. There may be certain times in the year or

month when such households simply do not have money to pay for cylinder refills.

Supply side and macro stakeholder barriers

Fraud, Cylinder Theft, Misuse and Under-filling

LP Gas supply arrangements, especially to remote rural regions, must include robust provisions

for managing and controlling fraud, cylinder theft and under filling by third parties. Much depends on

cultural mores regarding ethics. In

Africa, where there are serious levels of poverty, fraud, corruption and theft is endemic. Fraud will impact

every aspect of the supply operation from theft of revenue, the odd missing consignment of refilled

bottles, to the free supply of LP Gas to local ‘friends’. Cylinder theft is well known in the supply

industry; however it can become particularly acute in remote areas. In Brazil, which has many borders

with adjoining countries, cross border cylinder theft is a serious matter that requires careful control, for

example. Misuse of cylinders by rural householders is generally a matter of user education.

However if this matter is not dealt with it can lead to damage to cylinders and safety risks. Under-filling

of company branded cylinders by unscrupulous third party independent LP Gas suppliers will also

55


damage customers’ trust in the brand and lose revenue for the legitimate LP Gas supply company. All

these matters represent serious barriers that have to be overcome in order to run a trustworthy, legitimate,

cost conscious and therefore profitable supply operation.

‘Income of rural people, high switching from other fuel and low margin for company due to high

transportation cost ‘.

-Hong Kong

Safety

The safe supply and utilization of LP Gas has always been non-negotiable for all members of the

global supply industry.

Corporate reputations that have taken decades to nurture and maintain can be put at serious risk unless the

whole matter of safety is properly and fully addressed. In some countries where safety may be seriously

jeopardised in supplying LP

Gas to remote rural users, the potential commercial liabilities may be just too great for suppliers to enter

rural supply.

Limited Convenient Access and ‘In Time’ Cylinder Refills

LP Gas is often simply not available in close and regular proximity to rural households. Without a

local and trusted point of sale outlet that can be conveniently accessed by rural households, the product

will not be purchased and used.

Without a proper local network of sales outlets that provide convenient access by customers to the

product, it will be impossible to build LP Gas market penetration in the household sector.

Having a point of sale readily accessible to the rural householders is not sufficient. The brand names of

LP Gas suppliers frequently adorn agent’s premises in rural areas. However these have to be supported by

a regular supply of properly filled cylinders. Without timely availability of filled cylinders, the product

will not be relied on by rural householders for daily household activities such as cooking. Once the

reliability of supply is broken, households will readily revert to traditional fuels.

‘Barriers in rural India include 700 million population in 600,000 villages, wide geographical spread, low

per outlet sale in villages, difficult and expensive rural distribution, low product exposure and experience,

low penetration, low consumption, low reach of all forms of media, low literacy levels, high cost of initial

56


connection (deposit and stove), high recurring cost of refill, availability of other options for cooking at

low/zero cost, low levels of awareness and availability’.

-India

‘The main obstacle related to rural distribution of LP Gas is economic, in the actual market scenario it is

not profitable to distribute LP Gas to rural residential users. The bottled and canalized LP Gas are

regulated and its price is a maximum price, bulk LP Gas distribution is profitable since it has larger

margins’.

-Spain

Price Regulation

Price regulation can be a blunt and negative instrument when used. The ideal model that is

increasingly proving itself globally is the liberalisation of supply markets with free competition. Lower

prices should preferably be the result of competition rather than artificial price fixing. However, having

said this, a universal principle found in most energy markets is the regulation of energy prices, either by

the government, international supply cartels such as OPEC with crude oil prices; or, national electricity

utilities with carefully regulated tariffs. In the case of LP Gas either the lack of or the imposition of price

regulation can act as a barrier to market development. Lack of price regulation may retain excessively

high LP Gas prices making it unaffordable for the rural poor. Too stringent price regulation at too low a

level may act as a barrier to commercial LP Gas supply companies wishing to supply rural households.

‘Cheaper fuel alternatives and poor demand due to escalating cost of LP Gas.

Uneconomic for the distributors to travel to Point of Sales located in remote areas since the sales volume

is low’.

-South Korea

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RURAL INITIATIVES OF HPCL

Community Kitchens: Selling Cooking to Poor Families in India

The Hindustan Petroleum Corporation (HPCL) is a public sector undertaking of the government,

which hold 51% of the equity. It is the second largest company in India and operates refineries and the

whole liquid fuel supply chain involving petroleum products, lubricants and LP Gas. The supply and

distribution infrastructure of the company consists of over 6000 retail outlets,

1647 lubricants dealerships and 2200 LP Gas dealerships spread across the country, being monitored by

185 regional offices and a total workforce of 11,132 employees. HPCL operate 40 strategically located

LP Gas bottling plants. The LP Gas Business Unit is the second largest LPH marketing company in the

country with sales of over 2.5 million tonnes a year and a market share of over 25%.

In 1998 the LP Gas market in India was opened to competition, although in practice this is now mainly in

the industrial and commercial sectors. LP Gas supplied for domestic use in both urban and rural areas is

subsidised. In 2002, HPCL started a more focused and structured approach towards rural marketing to

households. Out of the total 2.5 million tons supplied annually, almost 0.5 million tonnes is being

marketed in

the rural areas translating to approximately 20%. The rural

population constitutes 70% of the total population of India, which translates to around 700 million

population and 138 million households. Currently LP Gas penetration in rural areas is estimated at 15%

compared with 75% in urban areas. Most of the urban areas have been nearly saturated and due to

relatively high inertia to brand switching, sustainable growth in future in the domestic segment is

expected to come largely from rural markets where penetration levels are low. Rural households are

therefore a key focus area for HPCL. Despite the challenges of rural LP Gas distribution, HPCL are

confident that given the vast potential, once critical mass is achieved, adequate returns will come.

58


In rural households, LP Gas is mainly used for cooking, although in a few cases, it is also used for

lighting. The average family LP Gas usage is 7.8 kg per month and 1.3 kg per capita per month. More

than 90% of rural villages are electrified although only 44% of rural homes have a connection. Supply is

normally from the electricity grid, although supplies are limited due to electricity shortages.

Despite a range of new and highly innovative supply measures for rural households, HPCL found that

they were still unable to penetrate a large cross section of rural households that could not afford their own

cylinders, appliances and regular LP Gas refills. They therefore pioneered an innovative scheme called

the HPGAS Rasoi Ghar’, or community kitchens. This provides a common cooking platform for one

village where users have to only pay for the time they use in cooking food. It is usually based on a

standard hourly charge. This eliminates both the barriers of one time high deposit and appliance costs as

well as the recurring cost of refills. HPCL now operates over 1400 community kitchens across India

benefiting more than 18,000 families.

Community kitchens are geared toward serving the below-the-poverty-line (BPL) families with ready-to-

use cooking facilities in a common place. The space for the kitchen is provided free of charge by the

village panchyat or villagers. HPCL renovates the area and provides the stoves, utensils and cylinders.

Normally 10 to 12 families in a village use the community kitchen for cooking their daily meals. For

taking forward this Rasoi Ghar concept, HPCL has tied up with various ground level organizations such

as NGO’s, various self-help groups, village panchyats, who all work alongside HPCL and carry out the

preliminary survey for identifying locations and for setting up the kitchens based on local conditions.

HPCL then subsequently open the community kitchens along with assistance from these various local

bodies

HPCL'S RASOI GHAR PROJECT

Cooking fuel in rural India is mostly wood which women have to fetch from the forest often spending an

hour or more every day.

A study undertaken by MART for HPCL in 2003 in 8 states found that the poor cannot afford LPG as the

initial connection cost for a 14.2 kg cylinder is Rs 1,600and the refill costs Rs 270. To address the

affordability issue HPCL introduced a 5kg cylinder at Rs 95 for a refill and initial connection cost of Rs

800.Simultaneously company dealers were advised to open extension counters in larger villages to make

the product available closer to the villagers and the new product was promoted in haats to create

awareness. Despite these initiatives sales did not pick up as expected because as a subsequent study found

the poor believed that the cylinder was unsafe – it could burst or gas could leak land some felt cooking on

gas could cause health problems as gas may get into the stomach! To overcome these myths MART

suggested a novel idea of a community kitchen (Rasoi Ghar) where women could experience the benefits

59


of safe, clean and convenient cooking on LPG without having to make a heavy investment in a new LPG

connection by bringing their raw materials. First and foremost, the idea is to introduce rural households to

this clean, efficient alternate fuel to firewood, expand its usage, and second, to address crying health and

environment issues stalking the hinterland.

On behalf of HPCL, MART has already rolled out over 1,600 community kitchens in 2,000-plus

population villages in half-a-dozen States, where women from the poorer sections can experience the

convenience of cooking with LPG in a pollution-free environment.

The PPP model involves the panchayat donating a small room accessible to the socially and economically

backward classes,

HPCL contributing gas stoves, LPG cylinders and cooking utensils and a woman from the Self-Help

Group (SHG) being appointed as a caretaker. Women bring in their raw material and take back cooked

food paying a small fee of Rs 2. The money collected is used to buy refilled cylinder and pay honorarium

to the caretaker. Thus the model is economically viable.

By and by, as women understand the safety aspects of LPG and get hooked to easy cooking, SHGs also

set up `kitty' schemes where monthly contribution sled to women in turn acquiring their own 5 kg LPG

connection.

"Once all the women realise the benefit, ease, safety and health aspects of cooking on LPG and the easy

finance helps them get their own connection, HPCL will uproot its fixed assets in terms of the community

kitchen and move it to the next village for a similar exercise," explains Mr S.V. Shahni, then Executive

Director-LPG, HPCL.In fact, other oil marketing companies have also been asked by the Union

Petroleum Minister to join the project and cover as much as they can of rural India.

"It is a mammoth task and involves the cooperation of the village panchayat, the SHGs and the

community. We've achieved success wherever SHGs have been involved. And now forest departments,

Lions and Rotary clubs are also pitching in with help," says Mr Shahni. HPCL is spending at an average

Rs 8,000 to set up a kitchen for a 20-family community.

The concept is also being extended to serve more purposes than one. The draft for the National Level

Programme of Rasoi Ghars includes making the community kitchen a hub that could do more things than

one — cook the mid-day meal for the local school, double up as a service counter and dealership outlet

for the company and help augment the caretaker's earnings by serving as a tea-cum kirana store.

The project also addresses health and environment issues. A study sponsored by the World Health

Organisation revealed that Indian women who use firewood regularly for cooking inhale the same amount

of carcinogen benzopyrene as if they were to smoke 20 cigarettes a day.

In terms of deforestation, a study conducted jointly by HPCL and the

Maharashtra Forest Department showed that the firewood consumption of a four member household is

around four kilograms a day or about 10 small trees (shrubs). This translates into average household

60


firewood usage of 300 small trees a month or 3,600 small trees a year. Shifting women to LPG would

take care of a large part of this deforestation.

HPCL Rasoi Ghar won MART the ‘Best Long Term Rural Marketing Gold Award and the Special Jury

Award 2005’ given by Rural Marketing Agencies Association of India.

LP Gas Propaganda Vans for Creating Greater Public Awareness in India

The Hindustan Petroleum Corporation (HPCL) have developed a novel way to greatly increase

public awareness about the availability and benefits of LP Gas in rural communities. With only a 15%

penetration of LP Gas among the millions of rural households across India, HPCL have to improve public

awareness of the product and benefits of this modern fuel. Potential household users also need to know

where and how they can avail themselves of LP Gas. To meet this need in a cost effective manner while

achieving maximum communication impact, HPCL devised what have become known as ‘propaganda

vans’.

The operation revolves around a ‘propaganda van’ that covers villages, haats and mandis (local

village weekly markets) generating excitement and communicating the message of LP Gas. Typically the

van is like a large panel van which is modified to give the look and feel of a publicity vehicle with

adequate space inside to carry all the equipment and communications material. The respective local

language is used in all communications. The body of the van is brightly painted with the LP Gas brand

name, logo and a visual of both a gas cylinder as well as the cooking process. Important messages about

LP Gas are prominently displayed all over the body of the van. The inside of the van carries a stove and

cylinder, and audio visual and video equipment, with all publicity materials.

In co-ordination with the respective local dealer and sales officer, the van covers 2 to 5 villages every day

on a pre-determined route. It drives in and around the village with announcements being made that it will

stop at a particular place in the village at a particular time and invites villagers to visit the van. To

generate excitement, in between announcements, popular songs are played. At the chosen spot, the van is

then set up with the following:

• Banners and other display material

• Video show

• Stage with microphone and speakers

• Actual demonstration of cooking using LP Gas

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There is an audio visual entertainment show and in between there are LP Gas product demonstrations and

communications of safety messages. This van aids the process of new connections (by collecting money

and information and issuing a receipt). In case villagers do not have adequate money on that day, the van

also informs them of when and where the distribution van will be coming next. The van then moves onto

the next village.

The typical agenda for the propaganda vans are as follows:

• How to use LP Gas and the benefits

• Safety

• Price structure of LP Gas (initial and recurring plus information on availability and the pricing of low

cost stoves)

• Finance Schemes (when available)

• Where, when, and how refills can be obtained and bought

• Co-ordination for release of new supply points

In addition, the operation also leaves behind promotional material in the villages in the form of wall

paintings, banners and tin plates. These are highly visual and low on text since literacy levels are low.

They serve to reinforce the messages of the propaganda van.

Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY)

“Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY)” was launched on October 16, 2009. The

Scheme aims at setting up small size LPG distribution agencies in order to increase rural penetration and

to cover remote as well as low potential areas (locations having potential of 600 cylinders (refill sales) per

month).

Coverage

The scheme is currently being launched in all states across the country.

Salient features of scheme:-

The agencies under the RGGLV will be of small size requiring lesser finance/infrastructure.

These agencies would be viable with monthly refill sales of 600 against 2,500 at present.

The agencies would penetrate deeper into the rural areas where regular distributorships become

unviable due to the scale of operation and investment.

62


RGGLV distributors may be viable for around 1,500 customers in the cluster of villages being

served.

These agencies will be self-operated: The distributorship himself will manage the agency, with the

help of his family member and one or two employees.

There will be no arrangement for home delivery.

Age limit for the distributor is being kept as between 21 and 45 years leading to new employment

opportunities for the rural youth.

Distributor under the scheme will have to be a permanent resident of the village(s) covered by

particular location.

Under this scheme, all agencies will be in the joint name of husband and wife. In case of

applicants who are single, an undertaking will be obtained that after marriage, ‘Spouse’ will

automatically deem to become ‘partner’.

This will be a step towards empowerment of rural womenfolk.

The likely capital expenditure for setting up of a new RGGLV distributorship will be about Rs.

3.21 lakh with land measuring 20 meter X 24 meter being owned by the candidate being an

essential requirement.

The distributor will be able to recover the capital expenditure by the time 1,800 new LPG

connections are released.

The indicative net income of the distributor would be about Rs. 7,500 per month.

An important feature of the scheme is that no interviews would be conducted and selection of the

distributors would be by draw of lots from amongst all candidates who have secured more than

80% marks on the criteria of financial capability and educational qualifications.

25% of the locations would be reserved for SC/ST categories in the respective states. 25%

reservation for the categories of Defence Personnel/Para Military Personnel/Physically

Handicapped/ Outstanding Sports persons would be clubbed under one common category. In the

common category, if no candidate is found, then the advertisement next time would be under open

category.

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Deepam Scheme

Government of Andhra Pradesh has been implementing distribution of 14.2 kg (single cylinder) or 5 kg

(double cylinders) LPG connections to BPL women in the rural areas since July, 1999 and in urban areas

since February, 2000 to reduce dependence on forest for fire wood, improve their health status, remove

drudgery due to conventional cooking and improve the general environment of the State.

Public Sector Oil Companies viz., Hindustan Petroleum Corporation (HPC), Bharath Petroleum

Corporation (BPC) and Indian Oil Corporation (IOC) release gas connections to the beneficiaries under

Deepam Scheme. The Government of Andhra Pradesh have been paying refundable Security Deposit to

PSU Oil Companies on behalf of the beneficiaries for release of LPG connections by PSU Oil Companies

towards cylinder & regulator deposit up to 31.1.2002 @ Rs. 1,000/- per connection thereof; upto

28.2.2003 @ Rs. 800/- per connection, from 1.3.2003 @ Rs. 750/- per connection, and with effect from

19.01.2005 @ Rs. 950/-. Per connection.

Based on the recommendations of the Group of Ministers, the selection criteria for the beneficiaries under

Deepam Scheme has been revised as follows:

1. The Gram Panchayats in rural areas and Municipalities in urban areas shall be fully involved in the

selection process; Gram Panchayat will hold general body meeting which will be presided over by the

Sarpanch and attended by all the Self Help Groups including DWCRA, Thrift Groups, Vana Samrakshana

Samithi etc. and all Mandal level Officers, wherein the beneficiaries based on criteria laid down will be

selected

2. The main eligibility criteria is to be a “poor family” irrespective of that family being a member of Self

Help Group/Thrift Group etc. The future usage of LPG by the beneficiary is of paramount importance in

the selection process in order to have the optimum utilization of the amount invested by the Government

for encouraging the consumption of LPG.

The field officers of the Department of Women Empowerment and Self- Employment and Department of

Municipal Administration co-ordinate in selection of the eligible beneficiaries in Rural and Urban areas

respectively. 32.95 lakh connections have been released under the Scheme so far.

64


An amount of Rs. 28.50 crore is provided in the budget for release of L.P. Gas connections under Deepam

Scheme during 2007-08.

Objectives of the Scheme:

To reduce dependence on forest for fire wood.

To improve health status, remove drudgery due to conventional cooking

To improve the general environment of the State.

65


RESEARCH

METHODOLOGY

66


RESEARCH METHODOLOGY

The information required for conducting the study would be based on questionnaire. The questions are

designed to know the parametrs affecting purchase decision for customer in buying LPG as fuel for

domestic, rural and commercial segment. The analysis would be based on primary data collected through

questionnaires and information obtained through internet and journals regarding the revival marketing

strategy adopted by HPCL in India.

RESEARCH DESIGN

The research design would be descriptive in nature as I have to find out the underlying perceptions and

behavior of consumers regarding LPG.At first expert opinion was taken to get the insight of the problem.

For the same LPG customers were interviewed using a questionnaire based on the parameters shortlisted

from literature review.

The feedback obtained from Sales officers helped in preparing the questionnaire for domestic and

commercial segment. After having the expert opinion and formulating the questionnaire according to the

feedback, field work was carried out. Field work included interviewing the domestic and commercial

LPG customers.

RESEARCH APPROACH- QUESTIONNAIRE

The questionnaire asked from respondents is basically of objective type. It is supported by both open and

close ended questions.

The questionnaire method is used to know the consumer satisfaction for service provided by dealer and

understanding reasons for consumer switch from LPG to other fuels. The questions are intended to know

the underlying factors that affect quality of service provided by dealers which intern affects brand image

of HP-GAS company in India.

RESEARCH METHODOLOGY- SURVEY METHOD

For achieving the objectives of study, survey was conducted. For conducting the survey a questionnaire

was made. The respondents were duly asked to fill questionnaires regarding their safety, awareness,

service provided and preferences for LPG and other fuels.

Method of Data Collection:

Primary Data:

The primary data for the project is collected through questionnaire filled by the respondents.

67


Secondary Data:

The secondary data used in the project has been collected from World LPG Association articles, company

websites & Books.

SAMPLING TECHNIQUE – Stratified sampling technique

Sample size- 100 HP-Gas customers

Statistical tools- MS-excel

METHODOLOGY

Survey for Domestic Segment

A survey was undertaken to identify customer satisfaction level and awareness about LPG for HP-

GAS customers and exploratory study was undertaken to recommend company best means to reach

customers, create awareness about HP-GAS application and to overcome potential barriers which intern

affects the purchasing decisions of LPG consumers.

These consumers buy 14.2 kg cylinders of LPG used as fuel in cooking. The survey involved the

residents of Mumbai from various locations.

Mumbai is a city of large variations in socio-economic conditions.

For this reason, it was decided to use a stratified sample based on the socio economic regions of the city.

The survey was administered to 100 consumers. The sample was distributed by region in proportion to

the number of households. Survey participants were selected randomly and participants were limited to

HP-GAS LPG residential consumers (homeowners), above 18 years of age who are responsible for LPG

purchase.

The inclusion criteria were designed to standardize the sample and achieve a more comprehensive

diagnostic framework.

A pilot study involving 20 respondents was initially used to test the questionnaire. The questionnaire was

then revised and these respondents were excluded from the final sample. In the second phase, after the

corrections, the final questionnaire was applied to the sample of 100.

Eight HP-Gas dealers were met from various locations and overview of area was taken into consideration

about market size, reach and coverage of HP-Gas customers and issues faced in market penetration. The

customers were face to face interviewed and responses were noted. The questionnaire was also applied to

customers at the time they purchased the LPG cylinder. The data collection phase took place for 15 days

in May 2014.

68


The first part of the questionnaire collected information on demographic characteristics: gender, age,

number of member in family. The remaining questions collected data on wide range of issues related to

quality service provided by dealer, periodic safety, and difficulty faced in booking refill and best mode of

communication to reach customers.

Most of these questions asked respondents to answer with “yes”, “no” or “never thought about it”. Other

questions involved a 5 point Likert scale with 1 “never” to 5 “always”.

The questions covered various aspects about awareness about HP-Gas application, Value added services

like IVRS, Pre-delivery check, safety, possibilities of customer switch towards PNG.

Survey for Commercial Segment

A survey was undertaken to identify parameters for acceptance of LPG as fuel and possibilities for

converting from other fuels to LPG and an exploratory study was undertaken to recommend company

barriers affecting commercial market expansion.

These commercial customers buy 19 kg cylinder of LPG which is used as fuel in heating. The survey

involved the commercial customers like textile industries, baking industries, restaurants from various

locations.

For this reason, it was decided to use a stratified sampling where strata of customers using LPG or

alternate fuel for heating were selected. The survey was administered to 40 samples. The sample was

distributed by region in proportion to the type of industry. Survey participants were selected randomly

and participants were not limited to HP-GAS LPG commercial consumers.




69


The samples selected is as follows:-

Commercial customers and textile industries were met from various locations and overview of area was

taken into consideration about market size, reach and coverage of HP-Gas customers and issues faced in

market penetration for 19 kg. The respondents were face to face interviewed and responses were noted.

The data collection phase took place for 12 days in June 2014.

The first part of the questionnaire collected general information on type and brand of LPG used. The

remaining questions collected data on alternate fuels used by industries and reasons for switching to

alternate fuels like coal and furnace oil were noted.

Most of these questions asked respondents to answer with “yes”, “no” i.e. closed ended questions”. Other

questions involved a 5 point Likert scale with 1 “never” to 5 “always” and some were ordinal scale based

on ranking of options.

The questions covered various aspects about type of fuel used, periodic safety check and reasons for

switching to alternate fuels, possibilities of industries to switch towards PNG.

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Survey for Rural Segment

A survey was undertaken keeping in mind 3 A’s of rural market i.e. Awareness-Affordability-

Availability to identify parameters affecting purchase decision in buying LPG as fuel and create

awareness about LPG for HP-GAS and exploratory study was undertaken to recommend company best

means to reach rural customers and means to create awareness about LPG and to overcome potential

barriers which intern affects the purchasing decisions of buying LPG as fuel.

These rural customers use wood as major fuel in cooking where LPG is used as substitute fuel. The

survey involved the responses of villagers from outskirts of Thane district from various remote rural

areas.

For this reason, it was decided to use a stratified sample. The survey was administered to 60 samples. The

sample was distributed by region in proportion to the number of households. Survey participants were

selected randomly, above 18 years of age who will be responsible for LPG purchase.

The inclusion criteria were designed to standardize the sample and achieve a more comprehensive

diagnostic framework.




Two dealers were met from Badlapur and Ambernath and overview of area was taken into consideration

about market size, reach and coverage of HP-Gas customers, and issues faced in market penetration in

rural market. The customers were face to face interviewed and responses were noted. The questionnaire

was also applied to customers at the time they purchased the LPG cylinder. The data collection phase

took place for 15 days in June 2014.

The first part of the questionnaire collected information on gender, age, number of member in family,

source of income. The remaining questions collected data on wide range of issues related to type of

alternate fuel used, type of dwelling, difficulty faced in booking refill, reasons for not using LPG and best

mode of communication to reach customers.

Most of these questions asked respondents to answer with “yes”, “no” or “never thought about it”. Other

questions involved a 5 point Likert scale with 1 “never” to 5 “always”.

The questions covered various aspects about awareness about LPG, Govt. schemes, subsidies, safety, and

acceptability of Rasoi Ghar and possibilities of rural households switch from alternate fuels towards LPG.

71


DATA COLLECTION

72


DATA COLLECTION

Domestic Survey:-

Area: - Mumbai

Sample Size:-100

Area wise segmentation of survey

SR.NO DEALER NAME AREA NUMBER OF

SAMPLES

1. Kumar Gas Service Ghatkopar 30

2. Colaba Gas Service Colaba 25

3. Lakshmi Gas Service Kurla 25

4. Super Gas Service Wadala 20

Commercial Survey:-

Area: - Mumbai

Sample Size: - 40

Industry wise segmentation of survey

SR.NO

TYPE OF INDUSTRY

AREA

NUMBER OF

SAMPLES

1. Textile Industry Badlapur, MIDC

Ambernath, MIDC

18

2. Baking Industry Badlapur,Ambernath 10

3. Hotel Industry Badlapur,Ambernath,Thane 10

4. Engineering Industry Ambernath,MIDC 2

73


Rural Survey:-

Area: - Thane Dist.Mumbai.

Sample Size: - 60

Area wise segmentation of survey

SR.NO NAME OF VILLAGE AREA NUMBER OF

SAMPLES

1. Varhad and Motha Varhad Kondeshwar,Badlapur 20

2. Kanoor gaon Kannor,Badlapur 10

3. Adivasi Pada Badlapur 15

4. Lawali Gaon,Samarthwadi, Wangni 15

74


DATA ANALYSIS

75


DATA ANALYSIS OF SURVEY

DATA ANALYSIS OF DOMESTIC SEGMENT

End HP-Gas customer questionnaire analysis for 100 samples.

OBJECTIVE: - Objective of survey is to find customer satisfaction for quality of service provided by

HP-Gas dealer and to identify best mode of communication to reach customers for creating awareness

about safety.

Respondents Profile:-

Annual consumption of Cylinders:-

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Inference:-

The survey was conducted among age group of 21 years-55 years. Responses were collected from HP-

GAS customers to understand customer satisfaction from quality of service provided by dealer and create

safety awareness of LPG.

The graph shows the average annual consumption of cylinders which shows 62% of families require 10

to 12 cylinders annually. This shows that the current subsidy of 12 cylinders by Govt. is sufficient for

domestic LPG market.

Preference in Booking refill:-

77


Inference:-

The above graphs shows the preference of domestic LPG customers, where 98 % customers book their

refill over phone through IVRS system.2% of customers who are uneducated and cannot use phone

personally visit dealer office and get booking done through dealer.

Difficulty is faced mostly by uneducated and aged customers and sometimes by customers who have only

one number registered on IVRS.

Feedback for HP-GAS staff:-

Inference:-

100% customers feel staff/delivery men/mechanic are courteous, as major efforts are taken by HPCL by

undertaking programmes like “Samvad” for Staff and “Samarth” for delivery men and mechanic to ensure

customer satisfaction.

78


Time required to get Refill:-

Inference:-

As per response from customers, refill is delivered at their door steps within 3days, while delay in

delivery is faced due to lack of proper transport in some outskirts of Mumbai.

Complaint redressal is main concern for customer which is duly met by HP-GAS staff as shown in graph

82% respondents feel their complaints are redressed.

Fast correct and convenient refill is given to customer which makes them loyal customer.

79


Safety awareness followed by customer:-

Inference:-

The above graph shows that 46% of customers dont follow safety measures given by company where

64% customers never change their hose pipe which has resulted to leakage accident in two of households.

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Safety measures followed by deliverymen

Inference:-

The above graph shows that PDC i.e. Pre Delivery Check followed by deliverymen needs to be

intensified which is a major concern for safety.

Awareness of HP-GAS Application:-

Inference:-

People prefer booking of refill through phone and online, but they aren’t aware of HP-GAS application

avaliable free where they can do multiple task like tracking refill,booking cylinder,rating

customer,lodging complaints of dealer which indicates need for promotion of HP-GAS application to be

done.

81


Awareness by Dealer/Company:-

The graph shows that 91 % customer feel that periodic awareness about safety of LPG is not

communicated to customers.The preffered mode of communication for company to reach customer is TV

advertisement and SMS. Customers also responded that using Print media & Social media interactively

can help in building brand image of company and safety awareness can be communicated to masses.

82


Inference:-

The above graph shows that 51 % customers are willing to switch over to PNG which is a potential threat

for all OMC’s due to easy availibility and affordability of PNG.

PNG has also adversely affected HP-GAS market share in Mumbai where 15 termination vouchers(TV)

monthly are recied by dealers.

83


DATA ANALYSIS OF COMMERCIAL SEGMENT

OBJECTIVE:- Objective of survey is to find parameters for acceptance of LPG as fuel in commercial

segment and possibility to convert them from conventional fuels to LPG.

Respondent’s profile:-

Inference:-

The survey for commercial segment was undertaken for industries using LPG. 40 samples were selected

from Textile Industry,Baking Industry,Hotel Industry. Objective of survey is to find parameters for

acceptance of LPG as fuel in commercial segment and possibility to convert them from conventional fuels

to LPG.

84


Acceptability of LPG as Fuel in Textile, Baking, Hotel industry:

Inference:-

As per the graph,only 27% of Textile industries are using LPG as fuel for heating.Initially LPG was used

as fuel but as textile industry is price driven company switched to coal and furnace oil as major fuel.This

affected HP-GAS commercial market share.

85


Inference:-

According to response noted,60 % baking industries use LPG as fuel for baking as prime importance for

baking industry is quality heating and cleaner fuel to maintain quality of product.

86


Inference:-

100% hotel industries rely on LPG as it is a cleaner fuel and easily available from market.

Due to high growth in hotel industry it has resulted to high demand of commercial LPG.

Market share of Oil marketing Companies according to survey:-

Inference:-

As per the survey undertaken major share of commercial market is earned by HPCL and then

BPCL.Other competitors are Reliance,Super Gas,GoGas,Gas Point,Shell.

87


Type of alternate fuels used in textile and Baking industries:-

Inference:-

As per the graph shown Coal is majot fuel used by textile,Baking industries.Other fuels used for heating

are Furnace oil and wood.These industries switched from LPG to conventional fuel due to easy

availabilty and affordability of conventional fuel.Coal and Furnace oil are procured at far cheaper rate

than LPG.These industries require quantity heating so they prefer conventional fuels over LPG.

Perceptions about alternate fuels used:-

88


Inference:-

As per the graph shown 38 % respondents feel that conventional fuels are safe over LPG while only 8 %

respondents feel conventional fuels are unsafe.

Possibility to switch towards PNG :-

Inference:-

As per the graph shown 44 % industries are willing to switch to PNG is it is readily available at

affordable price than coal or furnace oil.Still majority of industries are reluctant to switch to PNG as

additional equipment cost will be incured by company in setting up equipments compatible with PNG.

89


DATA ANALYSIS OF RURAL SEGMENT

OBJECTIVE:-Objective of survey is to find parameters affecting purchase decision in buying LPG as

fuel.

Respondents Profile:-

Inference:-

As per the above graph shown 60% of people in rural market have family members more than four

wherein 63% of respondent families lack education which is major parameter affecting purchase decision

of LPG.

5%

15%

20% 60%

Number of members in family?

Less than equal to 2 3 4 More than 4

37%

63%

Respondents Profile

Literate Illiterate

90


Inference:-

As per the survey conducted,majority of villagers live in Mud house with poor availability of water and

electricity.They lack local transportation which makes them denied of basic amenities.Majority of

respondents work as contract labour at farms.

10%

80%

5% 5%

Type Of Dwelling

Concrete Mud Kutha Hut

91


Inference:-

Wood is used as major fuel for cooking and heating because of its easy availibilty and as it is priceless.

Average time for collection of wood required is 4 hrs. which is used for two days.Wood is also stocked

before rainy seasonto use as source of fuel.

15% rural customers use LPG but as a substitute fuel.It is used during emergency eg. in rainy season

when dry wood is not readily available.BPCL earns a good market share in rural market than HPCL but

still OMC’s have very low rural market penetration of LPG.

7%

70%

8%

15% 15%

Type Of Fuel Used

Kerosene Wood Dung Cakes LPG Bio Gas

33%

67%

Brand Used

HPCL BPCL

92


Inference:-

As per the graph shown,promotion by wall painting,word of mouth, recommendations from family &

friends has influenced rural customer to buy LPG as fuel.Advertisement has also influenced 18% of

customers to buy LPG.

Inference:-

As per the graph shown annual consumption of cylinders by rural customers is very low i.e. majority of

customers require 5 to 9 cylinders annualy.The main reason for low consuption is,LPG is used as

substitute during emergency where wood is used as major fuel as it is readily available.

18%

28%

0% 27%

27%

What influenced to buy LPG?

Tv Adv Wall painting Visit to dealer Word of Mouth Family/Friends/Relatives

Annual consumption of LPG?

1 to 4 5 to 9 10 to 12 More than 12

93


Inference:-

As per the graph shown,83% of LPG customers have to visit godown to get there refill.

The additional cost of transportation is incurred by customer for every refill i.e. Rs.150 extra. where

godown is situated 15km away from residence.Complex and scare rural LPG market makes delivery of

refill infeasible for dealer.

Inference:-

According to survey undertaken,rural households refrained from buying LPG due to three major reasons

lack of awareness,availability and affordability.Majority of rural households percieved LPG as

17%

83%

0%

How do you get your Refill?

By Dealer Self visit to dealer office Local retail shop

0

10

20

30

40

50

60

High price Poor Availability TransportationIssue

Unsafe Easy availability ofalternate fuel

What refrained you from buying LPG?

94


unsafe.LPG penetration is very difficult in rural areas as there is easy availibility of conventional fuels

like wood.

Inference:-

80% of respondents using traditional cookining method conveyed that health hazards like chest

pain,cough,burning of eyes,poor visibility,respiratory disorders like astama are caused using conventional

fuels where major symtoms are seen in women.

80%

20%

Health issues faced by using Chula

Yes No

95


Inference:-

When interviewed majority of respondents percieved LPG as high priced and unsafe.

73% of respondents were unaware of benifts of using LPG.

Less promotion is important reason in lack of awareness of rural population about LPG.

2%

37%

53%

8%

LPG Is...?

Normal Price and Safe High Price and Safe High Price and Unsafe High Price and Neutral

30%

70%

Aware of LPG benifits?

Yes No

96


Inference:-

Rural respondents were unware of various financial schemes led by Govt. for promoting LPG in rural

market.They were also unaware of “Rasoi Ghar’-Community kitchen campaign and when explained 60%

respondents were willing to be part of it.

37%

63%

Aware of "Rasoi Ghar" and financial schemes by GOVT. for LPG connection?

Yes No

60%

40%

Would You Like To Join "Rasoi Ghar"?

Yes No

97


Inference:-

Exploratory questions were asked to rural respondents about best mode to promote LPG in rural

market,majority of villagers felt weekly haats i.e mandi and village fairs i.e mela are best means to

promote LPG benifits and create awareness.Company may also use wall painting and road shows to

create awareness of LPG.Advertisement through T.V was not preffered as they lack access to electricity.

Inference:-

As per the pie chart shown,90% of respondents are willing to switch to LPG over conventional fuels like

wood and dung if 3A’s are met i.e Affordability ,Availability, Awareness.

Acceptibility for 5kg cylinder was high among rural respondents.

0

10

20

30

40

50

60

Tv Adv Wall painting Road shows Haats Village Fairs

Prefferd Mode To Promote LPG

90%

10%

Switch to LPG?

Yes No

98


SWOT ANALYSIS

99


SWOT ANALYSIS

STRENGTH

India’s major Oil and Gas company

Large product portfolios

Huge distributor’s network all over India.

Leader in bulk LPG segment.

Very big consumer base with ever increasing demand for LPG rising 6 % every year

Consumer have good image about the company

High end automation in LPG bottling plants(eg.Flex speed carousal)

Well executed IT systems like IVRS for customers, DCMS for dealer.

WEAKNESS

Low above the line (ATL) activities such as advertisements through media, hoardings, bill boards

etc.

SWOT

Strength

Weakness

Opportunity

Threats

100


Since LPG marketing is same as that of FMCG products therefore requires continuous media

promotion as a reminder to the customers.

Company operations and marketing are bounded by government regulations.

High on imports of crude oil than exports

Low in promotion activities in rural market.

Net sales are affected by increase in costs.

OPPORTUNITY

Expansion in rural market and urban market as 2.1 billion population of India dont have access to

LPG (source-World LPG Association).

Ever increasing demand from domestic and commercial segment for LPG with increase in 6% per

year.

More oil well discoveries.

Upcomming stringent rules by Pollution Control Boards (PCB) making industries compulsary to

use cleaner fuels.

THREATS

Increasing market share of BPCL and IOCL in UP region.

High threat from Piped Natural Gas (PNG).

Aggressive marketing from local and private players like Aegis, Reliance, Shell, Super-Gas, Go-

Gas

Threat from Renewable energy resources like Biogas, Green Chula.

Government regulations.

101


KEY SUCCESS FACTORS FOR HP-GAS

Brand Name

A word, group of words, letters, or numbers that represent a product or service; also known as a product

brand. Name used to distinguish one product from its competitors. It can apply to a single product, an

entire product line, or even a company.

Brand Image

With LPG becoming a most demanding consumer good and the brand preference of the consumers

witnessing a change, brand image plays a key role in affecting the consumer’s decision to buy a LPG.

Hence, it becomes important to have a good brand name in the market, which can affect the customer’s

decision to buy a certain brand.

Proper and Longer Support- Distribution Channels

With increasing number of players in the market, it is vital for the companies to reach a wider segment of

customers. The LPG market in India is very vast and complex.

Public limited companies selling primarily through dealers and some at petrol pumps manage to achieve a

deeper penetration like IOCL selling 5kg FTL (Free trade LPG) through shops and petrol pumps. Most of

the companies have tied up with oil majors to market their brands like Suraksha pipes, Pigeon stoves,

Super seal India, Siddhart rubber, Green label stoves. This will help the private companies to establish a

wider access, brand awareness, as well as preference.

Quality of parent brand

Any product in its start has a parent or the initial product and then further modification or up gradation is

seen in the upcoming new product. If the initial product or the parent had good quality then this would in

turn affect the success of the product in the market.

New Technology and innitiatives

Up gradation done in the existing technology like IVRS (Independent voice recording system), DCMS

(Distributor customer management system) has reflected its success in market share. Introducing new

features to the existing LPG booking system like IVRS,HP-Anytime,Preffered time delivery has

definately attracted new markets.Also new strategies like Piped gas i.e reticulated system by HPCL where

HP GAS reticulated system supplies “Gas on Tap” though pipelines to your kitchen. Along with it

comes a host of benefits and user friendly features. Installed from centralized cylinder bank or bulk LPG

installation, HP GAS provides unmatched benefits to homes in both, old and new buildings.

102


Prices and Promotion

The pricing strategies for commercial segment has increased the importance of providing cost effective

product to the users. Innovative moves like introduction of

5 kg cylinder for rural market with affordable pricing has also increased rural market penetration of

HPCL. Thus product costing and competitive pricing are key factors affecting the market share of HPCL

in LPG segment.

Above the line (ATL)

ATL is a type of advertising through media such as television, cinema, radio, print, web banners and web

search engines to promote brands. This type of communication is conventional in nature and is considered

impersonal to customers. It differs from BTL advertising, which uses unconventional brand-building

strategies, such as direct mail and printed media (and usually involves no motion graphics). It is much

more effective when the target group is very large and difficult to define.

The term comes from top business managers and involves the way in which Procter & Gamble, one of the

world’s biggest advertising clients, was charged for its media in the 1950s and 1960s.

Advertising agencies made so much commission from booking media for clients that the creative

generation and actual production costs of making TV ads was free – hence above the line.

Everything else they paid for and were therefore below the line.

Below the line promotion (BTL)

BTL sales promotion is an immediate or delayed incentive to purchase, expressed in cash or in kind, and

having short duration. It is efficient and cost-effective for targeting a limited and specific group. It uses

less conventional methods than the usual ATL channels of advertising, typically focusing on direct means

of communication, most commonly direct mail and e-mail, often using highly targeted lists of names to

maximize response rates. BTL services may include those for which a fee is agreed upon and charged up

front.

BTL is a common technique used for "touch and feel" products (consumer items where the customer will

rely on immediate information rather than previously researched items). BTL techniques ensure recall of

the brand while at the same time highlighting the features of the product.

Another BTL technique involves sales personnel deployed at retail stores near targeted products.

This technique may be used to generate trials of newly launched products.

103


Private companies mostly sell their products through stockiest, dealers, distributors, mechanics, and retail

stores. Maximum sales are achieved through mechanics and retail stores. Margins and discount schemes

offered to the storeowners and mechanics prompt them to sell and promote a particular brand.

Environment Friendly

Now a day’s environment awareness is increasing a lot, people are more aware about benifits from using

LPG as it is a cleaner fuel to use, therefore providing the LPGas environment friendly fuel is one factor

for success.

104


SAMPLE

QUESTIONNAIRE

105


QUESTIONNAIRE FOR DOMESTIC SEGMENT

Customer Satisfaction Survey (HP-Gas)

LPG Customer Response (The purpose of this survey is to understand the consumer satisfaction for HP-GAS customers for service

provided by the dealers)

Name of Customer:- _________________________________________________________________

Name of Area:-______________________________________________________________________

Name of Distributor and Address:- ____________________________________________________

Respondent Number:- _____ *Please tick the relevant option.

1. Number of members in family?

o Less than equal to 2 o 3 o 4 o More than 4

2. What is annual consumption of cylinder for your family?

o 1-4 o 5-9 o 10-12 o More than 12

3. How do you book your refill?

o Phone

o Personally visiting distributor office

o Online

o HP-Gas Application for Mobile users

4. Do you find difficulty in booking your refill over phone in IVRS(automatic system)?

o Always o Mostly o Sometimes o Rarely o Never

5. Is distributor staff/deliverymen/mechanic courteous?


6. Are you getting free home delivery?

o Yes o No

7. Time required to get your refill within?

o 24 hours o 2 days o 3 days o More than 3 days

8. Are your complaints regarding booking/refill/repairs/leakage/return of subsidy amount being

redressed properly by distributer?


9. Are you satisfied by service provided by distributor?

o Yes oNo

10. Which type of LPG hose you are using?

o Rubber Hose o Suraksha Hose o Metallic Hose o Others

106


11. Do you periodically replace your hose pipe?

o Yes (If yes when______________________)

o No

12. Do you check weight & sealing of cylinders before accepting?


13. Does delivery man carry out pre-delivery check of cylinder before delivery?

o Yes o No

14. In last 12 months have you witnessed any accidents regarding LPG?

o Yes o No

15. In last 12 months have you received any safety pamphlet with your refill from

HPCL/Distributors regarding safety awareness & fuel saving?

o Yes o No

16. Which mode will you prefer for company to communicate with you?

o Email oSMS o Magazines, pamphlets or newspaper o Telephone

o Social media

Please specify_______________________________________________

17. Are you aware of the HP-Gas application for mobile users to refill your cylinders?

o Yes o No

18. Would you like to switch your connection to other company’s connection?

o Yes o No

19. If yes, to whom will you like to switch?

o IOCL o BPCL o PNG o Others

Please specify reason for the same____________________________________________

20. Will you recommend HP-Gas connection to others?

o Yes o No

21. What more services do you expect from company/dealer?

Please specify______________________________________________________________

22. What do you think service provided by dealer would be better if______________________

_________________________________________________________________________

*********Thank you for your feedback*****

107


QUESTIONNAIRE FOR COMMERCIAL SEGMENT

Survey for Commercial Customers (HP-Gas) Commercial Customer Response

Name of Customer:-____________________________________

Name of Industry and Type:-_______________________________________

Address:-_______________________________________________________ Please tick the relevant option*

1. Do you use LPG for your Industry?

o Yes o No (Switch to Section-A)

2. If yes, which brand of LPG you use?

o IOCL o HPCL o BPCL o Others

3. Monthly requirement of cylinders?

Please Specify________________________

4. At what price presently is Cylinder procured?

Please Specify________________________

5. Why did you choose LPG for your industry?(Please Rank 1-6)

(1-Most important 6-Least important)

Particulars Rank(1-6)

Quick heating

Readily available

Portable

Safer for use

For Backup fuel

Less price

6. Time required to get your refill within?

o 24hrs o 2 days o 3 days and more

7. Is periodic safety check followed by dealer?

o Yes o No

8. Which type of LPG hose you are using?

o Rubber Hose o Suraksha Hose o Metallic Hose o Others

9. Are safety equipment’s deployed?

o Yes o No

10. Are you satisfied by service provided by dealer?

o Yes o No

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(Section-A)

11. If no to LPG, what type of fuel is used by Industry?

o PNG o Coal o Furnace oil o Electricity o Others(Please specify__________)

12. What is monthly requirement for fuel used?

Please specify______________________

13. At what price is present fuel being procured?

Please specify the rate______________________

14. Please tick the following w.r.t importance of fuel used?

Particulars 1 2 3 4 5

Price

Availability

Safety

Quality(heating provided)

Brand used

(1-Most important……….5-Least important)

15. What is ignition type used?

o Gas pilot o Direct spark o Manual torch o others

16. Quantity of burners used?

Please specify____________________________

17. Location of heating equipment?

o Indoor o Outdoor

18. Compared to other alternate fuels how safe do you feel, Would you say they are____________

o Safe o Neutral o Unsafe o Don’t know

19. Have you witnessed any accidents in last 12 months?

o Yes o No

20. Would you like to switch to LPG?

o Yes o No

21. If yes, to whom will you switch?

o IOCL o HPCL o BPCL o Others

22. Any suggestions______________________________________________________


109


QUESTIONNAIRE FOR RURAL SEGMENT

Survey For Rural Market (HP-Gas) LPG Rural Customer Response

(The purpose of this survey is to understand the parameters affecting Rural market decision in buying

LPG as fuel)

Name of Customer/Occupation:- _____________________________________

Name of Village:-____________________________________________________

Gender:- __________

Name of Dealer:- ___________________________________________________

Respondent Number:- ____ *Please tick the relevant option.

1. Number of members in family?

o Less than equal to 2 o 3 o 4 o More than 4

2. Number of family member’s literate/illiterate? Particulars Number of family members

Literate

Illiterate

3. Type of dwelling?

o Concrete house o Mud house o Hut o Others

4. What type of fuel is used for cooking?

o LPG(Please specify brand______) o Wood o Dung cakes o Kerosene

o Biogas

5. What influenced you to buy LPG?

o Advertisement(TV) o Advertisement(wall) o Visit to Dealer o Word

of mouth o Family/friends/relatives o Others(Please specify________

6. If LPG, what type of LPG you use?

o 5 kg o 14.2 kg

7. If LPG, what is monthly consumption of cylinder for your family?

o 1-4 o 5-9 o 10-12 o More than 12

8. How do you book your refill?

o Phone o Personal visit to dealer office o Others_____________

9. Do you find difficulty in booking your refill over phone in IVRS (automatic system)?

o Yes o No

10. How do you get your refill?

o By dealer o Personal visit to dealer o Local retail shop

11. Nearest place where LPG is available

Please specify (Place and Distance) ________________________

110


12. Do you get fast, correct, convenient refill?

o Yes o No

13. LPG is used for?

o Cooking o Heating water o Others (Please specify____________)

14. Location of cooking?

o Indoor o Outdoor

15. What refrained you from buying LPG?

o High Price o Poor availability o Transportation issue o Unsafe

o Easy availability of alternate fuel

16. If no to LPG, does your family face any health issues using fuels other than LPG?

o Yes o No

17. Compared to other fuels how you feel LPG is_____&_____.

Price Please tick Safety Please Tick

Low priced Unsafe and dangerous

Normal priced Neutral

High Priced Safe

18. Are you aware of benefits from using LPG?

o Yes o No

19. Are you aware about financial schemes and subsidies by Govt. for LPG connections?

o Yes o No

20. Are you aware of “RASOI GHAR” campaign initiated by HPCL for rural market?

o Yes o No

21. Would you like to be part of “RASOI GHAR” campaign?

o Yes o No

22. What attracts you more?

o Adv.on Tv o Wall painting o Street plays o Others_______________

23. Would to like to switch to LPG?

o Yes o No

24. What services do you expect from company/dealer to promote LPG in your area?

Please specify______________________________________________________________


111


RECOMMENDATIONS

112


RECOMMENDATIONS

The objective of project is to generate sustainable ideas for market penetration of HP-GAS and

important parameters for acceptance of LPG in commercial and rural market.

The survey undertaken gave immense learning of LPG market for Domestic, Commercial and Rural

segment.

The recommendations are based on understanding and analysis of survey responses:-

For Domestic Segment:-

World LPG association survey for India states that 2.1 million of population lack access to LPG,

which shows a huge opportunity for HPCL to expand.

Competition is not intense in subsidized LPG business, there is good opportunity for HPCL to

expand in domestic segment by intense promotions.

Periodic safety checks to be undertaken by Dealer/Company at customer premises.

Ambiguity is caused to customer for new connection cost, thus new connection cost must be

displayed on HP-GAS consumer zone portal for transparency in process of connection.

HPCL can use the Internet as a powerful information tool and sales channel for promoting LPG in

domestic segment.

HPCL can use Internet as best mean to promote LPG awareness and safety.

HPCL can tap into social media to amplify their brand message and brand awareness.

Marketers can feed information and updates to HP-GAS consumer zone via blogs and other

postings, support online communities.

Like Dell Corporation’s @Dell Outlet Twitter account has more than 600,000 followers. Between

2007 and June 2009,

Dell took in more than $2 million in revenue from sales through advertisement on social media

provided through Twitter, and which inturn created brand awareness.

Periodic customer satisfaction surveys to be undertaken by robust local marketing agency for

company to understand key issues faced by customers.

IVRS system is well accepted by majority of customers for booking refill still certain gaps are

prevailing like less awareness by uneducated women and senior citizens

ATL(Above the Line) and BTL (Below the Line) promotion to be done aggressively for domestic

segment.

Complaint redressal to be done actively for complaints like booking/refill/repairs/leakage/return of

subsidy and customers must be made aware of 24hrs service of ESC(Emergency Service Cell) and

CSC(Customer Service Cell).

113


Promotion of Safety should be done periodically by best means of promotion tool suggested by

customers like Advertisement (TV) and SMS. Social media can be used interactively for creating

brand awareness and promoting safety measures.

Innovate strategies to be formulated to overcome future threat of PNG.

Intensive promotion of HP-GAS application for domestic LPG customers can be done by

promoting through tender notices advertisement via print media.

For Commercial Segment:-

As per survey undertaken it is strongly recommended to display rates of commercial LPG on HP-

GAS portal for transparency in pricing of commercial 19kg cylinder like other OMC’s IOCL and

BPCL.

Aggressive marketing of 19 kg should be done by dealer to overcome PMC competitors like

Reliance, Shell, SuperGas, GoGas.

Prompt service in terms of delivery is important parameter for commercial customer retention.

PNG is also serving as major threat for all OMC’s, thus innovative strategies like reticulated

system of LPG supply to be made available for certain group of industries to reduce cost.

Close check to be done on stock capacity of dealer’s godown, if possible stock capacity must be

increased to dealer having good market share in commercial LPG.

Stringent rules led by Pollution Control Board may increase sale of commercial LPG.

For Rural Segment:-

In country like India,71 % of population live in villages where LPG penetration is only

15 % among rich households.

Intensive marketing and promotion of LPG is required in rural market to create awareness and

promote LPG as best and safer fuel over wood and dung cakes.

Awareness of financial schemes and Govt. policies for promoting LPG to be created.

In areas like Wangni where forecasted refill can be more than 600 refills per month RGGLV

Yojana can be initiated.

High acceptability of “Rasoi Ghar”-Community kitchen when promoted (68%).

Re-Introduction of 5 Kg cylinder attached with stove for BPL (Below Poverty Line) rural

customers.

Initial connection cost to be reduced Rs800 (against Rs 1600 for14.2 kg) for year 2014.

Reduction in refill cost Rs 150 (against Rs 270 for 14.2 kg cylinder)

Town dealers must open extension counters in villages with population of 5000 to 6000

114


Use HPCL petrol pumps in semi urban locations for LPG distribution.

Create awareness by participating in Haats

Communicate and demonstrate safe usage instructions

Communicate price structure of 5kg LPG cylinder (initial & recurring)

Reminder message through wall paintings at haat boundary walls, bus stands

Conduct safety clinics during SHG meetings.

Demonstrate procedure to use LPG gas and safety precautions

Finance via Chit-fund concept where interested SHG members contribute Rs 100 each and draw

lottery every month, money collected buys connection for one woman.

115


CONCLUSION

116


CONCLUSION

HPCL is a huge brand with high market share in petroleum products like Lube oil,

LPG,Petrol,HSD,diesel and other petroleum products. Huge distribution network with high end service

delivery is main success factor for HP-GAS. Ever-increasing demand is promptly met by HP-SBU unit

because of its effective planning and forecasting with respect to Govt. regulations. Distributors or dealers

are key players in market expansion of HPCL and are directly linked to building brand image of company

by providing quality service to customer.

As rightly quoted by Mahatma Gandhi:-

“A customer is most important visitor on our premises. He is not dependent on us. We are dependent on

him. He is not interruption in our work. He is purpose of it.He is not outsider in our business. He is part

of it.We are not doing favor by serving him.He is doing us a favor by giving us an opportunity to do so”

Thus Customer satisfaction is utmost important parameter for customer retention and market expansion.

HPCL faces huge competition in commercial segment from inter OMC’s and PMC’s where major threat

is from PNG as majority of customers are willing to switch to PNG due to easy availability and

affordability.

Thus until the proper infrastructure for distribution of Natural gas is not present, Liquefied Petroleum

Gas will continue to be in existence.

Thus to conclude HPCL indeed is a World Class Energy Company known for caring and delighting the

customers with high quality products and innovative services across domestic and international markets

with aggressive growth and delivering superior financial performance. The Company has proven to be

model of excellence in meeting social commitment, environment, health and safety norms and in

employee welfare and relations.

117


BIBLOGRAPHY

118


BIBLOGRAPHY

Weblography

www.hpcl.com

www.iocl.com

www.bharatgas.com

www.worldlpgassociation.com

www.indiastats.com

www.bp.com

www.toi.com

www.censusindia.com

www.martindia.com

www.hpanytime.com

www.wikipedia.com

Sales and operation manual of HPCL

Newspaper articles

WLPGA Association articles

HPCL organizational newsletters

HPCL action plan 2015 manual “Target Shikhar”

http://www.hpcl.com/

http://www.iocl.com/

http://www.bharatgas.com/

http://www.worldlpgassociation.com/

http://www.indiastats.com/

http://www.bp.com/

http://www.toi.com/

http://www.censusindia.com/

http://www.martindia.com/

http://www.hpanytime.com/

http://www.wikipedia.com/

119


ABBREVIATIONS

120


ABBREVIATIONS

ISO International Organization of Standardization

HPCL Hindustan Petroleum Corporation Limited

BPCL Bharat Petroleum Corporation Limited

IOCL Indian Oil Corporation Limited

SHG Self Help Group

OMC Oil Marketing Companies

PMC Private Oil Marketing Companies

RGGLV Rajiv Gandhi Gramin LPG Vitaran Yojana

BLEVE Boiling Liquid Expanding Vapour Explosion

LPG Liquefied Petroleum Gas

MPSU Mega Public Sector Undertaking

MMTPA Million Metric Tonnes per Annum

MRPL Mangalore Refinery & Petrochemicals Limited

HTL Heat Transfer Labelling

TMTPA Thousand Metric Tonnes per Annum

NOC No objection Certificate

DPR Detailed Project Report

EIA Environmental Impact Assessment

CUC Crisplant Universal Controller

HMI Human Machine Interface

FCS Filling Control System

CVT Compact Valve Tester

ELD Electronic Leak Detector

O/L O’ring Leakage

CCS Chain Conveyor System

T/T Tank Truck

TDM Terminal Data Management

TTES Tank Truck Entry System

SRV Safety Relief Valves

NDT Non-destructive test

Date post:	01-Jul-2015
Category:	Marketing
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